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Conservative option strategies, what did you buy or sell today?
It's good advice. I sell quite a few puts when it makes sense. It's a battle to not force a strategy and push trades. I really try to abide by some personal rules, even if they are a little general. Not saying I don't bend mine, but I have learned not to go buck wild spitting into the wind.

Selling puts is statistically more likely to succeed when a stock is at least somewhat oversold, or appears to be sitting near support anyway. My rule is to never do the exact opposite of that. This would be when I am considering a call sale if income is the goal. IMO it's pretty rare when selling both a call and a put on a stock would be appropriate. It's one or the other, or possibly neither.
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I do not know how conservative you guys would rate this. Probably not very as we are talking about airlines.
But please do let me know your thoughts. This is one of my first long term option trades, as you guys know I have lots of short term ones under my belt (1-2 weeks) but now I went for almost half a year. This is also my first time "laddering" multiple puts on the same underlying with different strikes.

Spirit Airlines (SAVE) - December 18 puts
1x $15 - premium was $362
2x $10 - premium was 2x $146

Stock stays above $15: I make $654.
Stock is between $10 and $15: 1 put gets assigned. I own 100 shares with an average price of $15. With the premiums taken into account, break even price for these 100 shares is $8.46.
Stock is below $10. I get assigned 300 shares with an average price of $11.67. With the premiums taken into account, break even price for these 300 shares is $9.49.

Overall, I'm quite confident that the airline industry will survive. I'm getting quite a decent amount of premiums for a small amount risked ($3500 total) and of course I still have the possibilities of closing this early or rolling it forward.
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(07-02-2020, 10:40 AM)crimsonghost747 Wrote: I do not know how conservative you guys would rate this. Probably not very as we are talking about airlines.
But please do let me know your thoughts. This is one of my first long term option trades, as you guys know I have lots of short term ones under my belt (1-2 weeks) but now I went for almost half a year. This is also my first time "laddering" multiple puts on the same underlying with different strikes.

Spirit Airlines (SAVE) - December 18 puts
1x $15 - premium was $362
2x $10 - premium was 2x $146

Stock stays above $15: I make $654.
Stock is between $10 and $15: 1 put gets assigned. I own 100 shares with an average price of $15. With the premiums taken into account, break even price for these 100 shares is $8.46.
Stock is below $10. I get assigned 300 shares with an average price of $11.67. With the premiums taken into account, break even price for these 300 shares is $9.49.

Overall, I'm quite confident that the airline industry will survive. I'm getting quite a decent amount of premiums for a small amount risked ($3500 total) and of course I still have the possibilities of closing this early or rolling it forward.
The structure of the trade is sound enough and conservative enough, if you are comfortable with the underlying at the possible assignment prices it's a good trade IMO.
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Thanks for the comment Mike.
SAVE is not one that I wish to buy & hold forever, simply due to it being in the airline industry and it does not pay a dividend. Then again, both of those are true for Ryanair and I am a big believer in them and as such it is part of my portfolio. I just think the low cost model is the way forward.

I do not really want these to get assigned, and I really do not think it'll go below $10 again, but it's definitely a scenario I can live with.
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