Cramer and Options trading. Sounds like a recipe for disaster.
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Can I "roll over" my Options contract month over month?
- Thread starter Hoofhearted
- Start date
"m afraid that if I buy too cheap, just for the higher profits sake, then could I get caught with my pants down, and the stock just wont have time to recover. If I'm forced to roll-out when i'm under water, it will cost a much higher premium than if I simply buy myself time now, while the premium is relatively low."
I have this wrong, don't I? If the price drops a little and I have to do a roll-out, I just buy the new contracts as cheap as I sold the old ones? Then I'm just making greater returns on those new contracts when the price bounces. So in the long scheme of things, roll-outs really are a way of preserving your original investment- as long as the spread is tight, and market eventually gets to where I think its going.
I think I get duhmber by the minute sometimes. Wow!
I have this wrong, don't I? If the price drops a little and I have to do a roll-out, I just buy the new contracts as cheap as I sold the old ones? Then I'm just making greater returns on those new contracts when the price bounces. So in the long scheme of things, roll-outs really are a way of preserving your original investment- as long as the spread is tight, and market eventually gets to where I think its going.
I think I get duhmber by the minute sometimes. Wow!
So, what are the benefits of doing way out INT's?
<<< I'm not sure what a buy write strategy is. That is to say- I'm sound on the basics of a call/put strategy, and I feel confident there is money to be made with these strategies(I prefer calls to puts though), but the more advanced methods still elude or confuse me. >>>
The only reason to use a buy/write strategy,... is if you want to be able to sell naked or cash secured puts as a strategy, but your broker won't give you permission to sell naked puts.
If you don't want to sell naked or cash secured puts, or if your broker will give you permission to sell naked puts, but that is not a strategy you want to use,.... then don't worry about the buy/write strategy.
It is mostly used as a substitute for selling naked puts.
It's just that you are doing it via the back door, rather than going through the front door.
It's a way to select an OTM strike and desired credit you want, and to be guaranteed that strike and credit.
If you can't get both, the trade is not initiated.
The only reason to use a buy/write strategy,... is if you want to be able to sell naked or cash secured puts as a strategy, but your broker won't give you permission to sell naked puts.
If you don't want to sell naked or cash secured puts, or if your broker will give you permission to sell naked puts, but that is not a strategy you want to use,.... then don't worry about the buy/write strategy.
It is mostly used as a substitute for selling naked puts.
It's just that you are doing it via the back door, rather than going through the front door.
It's a way to select an OTM strike and desired credit you want, and to be guaranteed that strike and credit.
If you can't get both, the trade is not initiated.