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I'm confused. What does being $2.83 ITM mean? Can you help me out while I wait for those penurious option MM's to toss me a few cents more (yawn)? :)

Nothing lasts forever. For a price, I could show you a moderate risk, high reward system that worked well (6 figures) in '08 and '09 but isn't worth squat now. Edges can be fleeting. Sooooo, what do you think worthless is worth now?? :)

---------------------------------------------------------------------- Quote from spindr0: QQQQ is currently $57.17 and you buy the Apr 53p for for 57 cts (45 days until expiration). QQQQ drops to $50.17 immediately. At that point, the 53 put will be $2.83 ITM...

QQQQ is currently $57.17 and you buy the Apr 53p for for 57 cts (45 days until expiration). QQQQ drops to $50.17 immediately. At that point, the 53 put will be $2.83 ITM What put is $2.83 ITM today? Answer: current price + $2.83 or $60 put Apr 60p is $3.27 bid so your put goes up...

Nothing wrong with your hypotheticals as long as the market cooperates. Given a comfort with owning stock (being an investor) and hoping/waiting for the stock to "eventually" rise, you might also consider rolling the appreciated put down to a lower strike thereby pulling money out of the...

Can I assist? I'm quite good at painting the tape.

75% of this game is 1/2 mental! Yogi

Can I come out of the corner now? (drumming fingers) (repeating number sequences)

Correct, a long put is different than a long call. However, I compared put protected stock with a long call (they're equivalent) which is what you asked about in your original post. Apples and oranges. I suggested other ways (not necessarily better) ) to reduce the cost of hedging and to...

The stock protected by a LEAP put is equivalent to a long LEAP call. Writing a short term OTM call against that creates a diagonal spread (a diagonal collar). As donnap mentioned, it profits in the middle and loses on the wings. You can eliminate the loss to the upside by making sure that...

Cello, how are you? How's your viola? (I should be banished to Yahoo for that) :)

A valid point but a bad example. Hedging with longer term options costs a lot less. IMO, using an option that close to exp is only for someone trading in a similar time frame and adoitly, at that.

Very few have responded to the 2nd half of your question. Put protected stock will lose, period. That position is equivalent to owning a long call and long calls lose as the underlying drops. The maximum loss will be apporximately the cost of the put plus the distance down to strike...

Moot points don't make incorrect statements correct :) Covered call has same risk as equivalent short put

There are option calculators all over the web (link to one below). Software as well. Some brokerage firms provide them as well...

Timing is everything :)

Might wanna rethink that one :)