Might Be in Trouble: What happens when a Naked Put Expires?

Yeah look at all the people that got it and wrote in large numbers...I had to delete and empty my inbox 2x already from all the people writing me who got it.....
 
El OchoCinco said:
I dont need to read your bullshit because you misquoted mine. I made a simple statement and you came back with another completely different set of facts.


Shhhh adults are talking.
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Dude! You don't know what you are talking about. It's not like you have written a published book about options trading.

:)
 
El OchoCinco said:
Why would you buy the stock at $42 and sell the put for $1? That is a double bullish position?

WTF are you talking about?

The poster said you use it to get a stock at a discount. Well if the position goes against you own a stock at a higher price then the current market. So the whole buy stocks at a discount is a misstatement that ignores the risk?
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Let's start again. You don't know the meaning of 'vs' . Here is google definition.
VS means "Versus, against" So now you know - VS means "Versus, against" - don't thank us. What does VS mean? VS is an acronym, abbreviation or slang word that is explained above where the VS definition is given.
You went on a rant with misunderstanding and replaced 'vs with 'and'. Now read original comment again without taking a bird.
 
Uh I went past the versus already...that was not the point of my original post. I realize you said versus and then commented that my original post was about someone stating to sell naked puts to buy stock at a discount.

I offered a scenerio that is very likely where you are getting the stock at a loss because people market naked puts as getting stocks at a discount. This is very misleading. Your response was to imagine a different scenerio altogether and thus not relevant to my point.
 
El OchoCinco said:
Uh I went past the versus already...that was not the point of my original post. I realize you said versus and then commented that my original post was about someone stating to sell naked puts to buy stock at a discount.

I offered a scenerio that is very likely where you are getting the stock at a loss because people market naked puts as getting stocks at a discount. This is very misleading. Your response was to imagine a different scenerio altogether and thus not relevant to my point.
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you based your trade on hindsight price of 37. However, you did not identify the alternative to selling the otm put strike $40 is "buying the stock at current price $42". You jumped straight to 37. Do the math again. buyu using stock price at the time of selling the put. Not at 37.
 
Just need to jump in here for a sec and clarify. Many traders sell cash covered otm puts not just to generate income but to buy stock at a lower price than it is currently trading for! The sale of the put will lower your cost basis. You receive the premium upfront for the obligation you are taking to purchase the stock at a lower price point. You have the same risk as owning stock. That's why you would do this on a stock you want to own! Maximum loss is stock ownership.
 
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