When he sells the puts, they are cash secured. When he sells the calls, they are covered with his shares. He does not use any margin. That is what I mean by "he is not overleveraged". Of course, you can argue whether it is a good investment or not. But it is an investment in a diversified "long...
B1,
I believe you have raised some reasonable objections.
1. This strategy provides LIMITED downside risk compared to owning the underlying outright.
2. This strategy LIMITS FULL upside appreciation compared to owning the underlying outright. (a little more on this later.)
3. This strategy...
there's a downtrend line off the highs coming in around 3900 and that would be about a 100pt move from the 804 swing low yesterday. should be interesting to watch that level.
For this trade, if vol had been liquid, and you were looking at the fly, how would you "most likely" have structured it? which strikes? puts or calls? Please forgive the basic question, I am trying to expand my horizons.
newbie
Hey Destriero,
How was the MSTR trade structured? From your posts, it looks like long underlying, but that just seems so vanilla for you. Very successful, but vanilla. lol.
that covers all the bases, and it is reasonable logic. must get a close over the 5-6 level to see if that push towards 20 can happen. being tested now.