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Conservative option strategies, what did you buy or sell today?
(03-18-2020, 07:03 AM)NilesMike Wrote:
(03-17-2020, 09:33 AM)john Wrote: T currently trading @ ~$33
Selling April 17 T put @40 strike are $7.50 
Selling Jun 19  T put @40 strike are $8.00
T hasn't traded above $40 in three years the 20 year chart only shows it above $40 a few times.
This would be "chasing premiums scenario" 
However if you got assigned it would mean the market vastly improved?
Please critique my theory
edit to add I own T already mostly purchased around $33

You will be assigned the stock at the $$ of your put $40 if it's 39.99 or less at expiration, so no the market doesn't have to "vastly improve" T could be $30 at expiration.

The DITM puts have less Implied Volatility than the OTM puts. So you're receiving LESS premium relationally than you could if you sold the OTM put, and since it's ITM you'll get less decay available to make a profit before expiration.

Sell the July 28 Put for $2.00 and if assigned, your cost is $26.00. Stcok closes at $34, I keep $2
Sell the July 40 put for $8.00 and if stock goes to $28, your cost is $32.00. Stock closes ate 34, you keep $2

I don't like the DITM put idea but it's your trade.
Agree with Mike.  The best premium is never that deep in the money  I almost always sell strikes fairly close but out of the money.  If T were currently at $26 I might entertain an ITM put around 28-30 because T has proven to have fairly strong support when it dips below 30  Truth is I would probably be better off owning T at that price though.  Huge yield and likely to bounce off that level. I'm rarely selling 90 days out in a normal market. No chance I am doing it now T drops $5 and you might just get assigned those 40 strikes just a couple weeks from now I've had puts assigned to me way before expiration lately. It does happen.
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Messages In This Thread
T puts ? - by john - 03-17-2020, 09:33 AM
RE: T puts ? - by fenders53 - 03-17-2020, 10:32 AM
RE: Conservative option strategies, what did you buy or sell today? - by fenders53 - 03-18-2020, 07:56 AM
RE: WEN options update - by john - 03-23-2020, 09:53 AM
RE: WEN options update - by fenders53 - 03-23-2020, 10:40 AM



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