Quote from dojibear:
Hi ChrisM,
When you said '...other alternatives to protect your position", I supposed you meant buying some cheap puts as insurance? "AFLACK!!"
As for SSF, I am still waiting for its maturity, i.e. the volume to pick up. I haven't read nor looked into it, maybe they are trading with fair volume now.
I've thought about ITM vertical spread, but because I'll have to buy deep ITM call, and sell ITM call, the spreads are too high (and I'll have to pay it again to get out of the spread). However, this spread gives limited loss.
What concerns me most about this ITM buy/write is that the profits are capped small, and the losses are unlimited. It will take only one trade that goes sour on the day when I am not at my desk, or physically and/or mentally sick, hence not following initial plan, to wipe out most or all of profits from previous good trades.
I am new to option spreads, so whatever I said sounds naive, please forgive.
Cheers!!
Hi dojibear,
1. Protective put - simple and takes some profit out but works in worst case scenario like the one you described later (sour day)
However, there are some other adjustment strategies.
2. SSF - depends what you do. ETFs are not bad. See yourself.