But what is the advange in taking a tiny extrinsic value (3 days), whilst your margin flies to X10 and your risk increases, not decreases, even if just for 3 days?
I need help managing a bull put; I did not fully understand the trade.
- Thread starter klattermusen
- Start date
Because after the short put is assigned due to the ex-div, you have no more short put so it's just a single long put. You can sell it whenever you want. There is no more margin change or any increase in risk. And the advantage is if the stock doesn't move down too much, you can still sell the long put for some value instead of letting it expire worthless. Everybody thinks it's not worth it but like I said, I like to cover all bases and this is what I would do.
If the short puts are assigned, and long puts are sold , the margin changes a lot.
And if the stocks moves down when un-hedged, let's say to 9$... OP would be losing 2$ (x20000 shares), 40k loss, minus credit and little extrinsic. Instead of the 0.60$ (x20000 shares) 12k loss.
Check your math, reread McMillan,reread your posts..in no particular order
This is essentially what you said..
"After you are assigned on the short,you have no more short put so its just a single long put...you can sell it whenever you want"
And what do you propose he does with the long stock from assignment??
This isn't cash settled...He will be long stock....
OP is in a synthetic call,and you are officially a numnut
put
This is essentially what you said..
"After you are assigned on the short,you have no more short put so its just a single long put...you can sell it whenever you want"
And what do you propose he does with the long stock from assignment??
This isn't cash settled...He will be long stock....
OP is in a synthetic call,and you are officially a numnut
put
Good grief. Took me right back to when I was fishing up in Meenasooota and northern Wisconsin. If you thought the Japanese used circumlocutions and indirection, a visit to those parts would make you understand that they're rank amateurs.
A feller might could tink dere was sumpin' wrong wid a guy like dat if he was to tink anyting bad of a feller... which nobody around here would, py yimini. Dis just ain't dat kinda place.
@TheDawn
I hope you realise that when it comes to options, sometime you argue with people (not me) who just in monthly commisions spend more than an average yearly salary?
In other posts, you compared a few grands to months of groceries, which is accurate.
Some of the traders you argue with, might spend months of groceries in just a week of commisions, and they retired early from a 9to5 thanks to finance...
I hope you realise that when it comes to options, sometime you argue with people (not me) who just in monthly commisions spend more than an average yearly salary?
In other posts, you compared a few grands to months of groceries, which is accurate.
Some of the traders you argue with, might spend months of groceries in just a week of commisions, and they retired early from a 9to5 thanks to finance...
[blink] Whoever it is that you're responding to - I was right to block him. There's only so much dumbth one wants to see in the course of a day.
As to your implied compliment - "reread McMillan" - you're being very generous...
you're arguing with someone who seems incapable of understanding the utility of a married put, despite yourself and @cesfx illustrating it with brightly-colored teaching aids. Time to give up (unless you're just entertaining yourself by seeing how far bullheadedness can go. In which case, carry on - it'll be a long journey to the bowels of the earth.)
