I need help managing a bull put; I did not fully understand the trade.

I bet talking to my 5 year old about options would be less frustrating and that would be after I abruptly turn off the tv show she was enjoying so much.

taowave said:
I have read and reread your posts,and more importantly,I read the OP post. He doesnt want additional downside exposure,which you seem to ignore.



Back to you..

What is the significance of trading(lifting a leg) ex div? What advantage does one get? Are you suggesting that there is an upward bias post going ex??

How does one know if the ATM leg is "no good"? Thats simply your opinion.

The .60 of risk is yesterdays news. The trade is marked where it is. New day,new trade.

Why are you hell bent on taking a bet with a halfway human risk reward to one with an unfavorable risk reward,especially if he is not assigned on the short put.I did not see the OP stating he is a buyer at 10. To the contrary.He does not want gap risk,i.e downside exposure more than he took on via the put spread.

FWIW,lifting legs to get back the debit(risk .60) is not a great approach to trading,especially on an oversight trade. Are you suggesting that selling the OTM put with 3 days left is a great opening trade??? In 2 seconds,I saw much better trades which I will be looking at on Monday.

And of course if the stock doesnt go down any further,there is no harm lifting the leg IF you want to be naked long..OP does not..

Starting Monday..

Here is where you get very confusing.

You are suggesting the OP sell the 3DTE ATM out ex Div . Then come Monday,he can buy a put or put spread. Why wait till Monday??? If the calendar is trading at a favorabe price,why wait? Why be naked short the 11 put for 3 days? Whats magical about Monday?

Forget selling the upside call.Makes no sense,but you arent going to listen..
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GRASSHOPPER,

Cesfx gave you a very strong hint to what I meant " buyer of the calendar"..

Look at what you are suggesting,but simplify it..

You are welcome

TheDawn said:
Too late. :) What do you mean "a buyer of the calendar"? You lost me there
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taowave said:
GRASSHOPPER,

Cesfx gave you a very strong hint to what I meant " buyer of the calendar"..

Look at what you are suggesting,but simplify it..

You are welcome
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Ok so now you are doing the same shit as your idol You Know Who (since my last post mentioning his name got deleted by the mods - I guess you are not the only one who puts people on a hierarchy LOL), fancying up terms unnecessarily without explaining just to show an air of superiority. What's this "buyer of the calendar" in terms of options trading? You mean buying a protective put with the next or later expiration date for the underlying if the OP gets assigned? If that's what you mean, yes you would be correct. That is what I am suggesting with also the possibility of selling the long put leg if he can to maximize profit. If you believe options trading is all about maximizing the spread, then every single penny counts.

cesfx said:
Way too long to read...
I stopped when you said op can buy another put to hedge, after he sells his own put, and margin change being irrelevant for a couple of days.
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You got the gist of it except I didn't specify that he can only buy the longer-term put after he sells the long put leg.

Congratulations!! You can read like the rest of us!!

cesfx said:
Forget the part about hierarchy...
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That is a shame. I guess this is where we agree to disagree.
 
spy said:
Those long puts look pretty useful now, don't they?
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Yes that's why the OP has already "bought the calendar" I am sure (if OP is assigned and is intending to keep the underlying) and is contemplating selling the "front" one. Looks like it's going to fill the gap tomorrow. This stock always bounces back after ex-div., usually right away too except on one occasion where it took a few days to do but eventually it still did.
 
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