02-16-2019, 07:59 AM
(02-16-2019, 06:11 AM)fenders53 Wrote:(02-16-2019, 03:54 AM)crimsonghost747 Wrote: I am very much a believer in the fact that if you choose your companies correctly, then over the long term it doesn't make a big difference if your entry point was $45 or if you managed to bring it down to $44 with a succesfull option strategy. Sure the latter is better, especially if you can do it consistently, but is it worth potentially missing oMy last post on this thread. We can blow up an option trading thread if you wish
Long story very short: Just because you made a profit it doesn't mean that it was the right move to make.
And briefly (if I am even capable of that lol) ....
By the above logic any stock we buy now is a mistake because it was cheaper five years ago?
No. I'm saying 5 years ago it would have been a mistake to sell a put that didn't get assigned vs just buying the stock. Pretty much any stock. I can't look to the future, otherwise I'd tell you what the price of KO will be on 16th of February 2024 and then we would know if the put was a better idea than just buying at $45.24. (Friday's close) Of course if it gets assigned then it's all good for you, and I certainly hope it goes that way.
If you think KO is a good play going forward then I really hope you do get assigned. Right now you are looking at a difference of $0.24 per share between the current price and your strike. If KO keeps executing well (which you seem to believe in) then it would be a big loss if you missed out on a good run because you wanted to get in with a put at $45 instead of going in straight at $45.24.
KO is just used as an example. I guess I'm just not a big fan of giving up your options (in both meanings of the word) unless you are very confident on the direction the stock is going short term.