your main trade is buying puts? Would you like to explain a bit your strategy (without going too much into the details of course)? I'm really curious because every time I bought puts I got burned..
Put trades
- Thread starter moolah
- Start date
your main trade is buying puts? Would you like to explain a bit your strategy (without going too much into the details of course)? I'm really curious because every time I bought puts I got burned..
Everyone keeps talking about stocks here, which do not expire. What about options on futures? That is what gets my goat. How do you time a FOP, ever?
My latest NQ swing, I was long at 7831. The future would expire on Dec 19th (Well, that is LTD).
So I have to be out of the long fut by that date.
So would I buy a NQ put at that same strike price, 7831, for Dec 19th date OTM or ITM to be able to offset the loss of the potential destruction of a market collapse of the underlying future?
My latest NQ swing, I was long at 7831. The future would expire on Dec 19th (Well, that is LTD).
So I have to be out of the long fut by that date.
So would I buy a NQ put at that same strike price, 7831, for Dec 19th date OTM or ITM to be able to offset the loss of the potential destruction of a market collapse of the underlying future?
You'll want to be dealing with an underlying that is consistently volatile, and have a strong system in place for the underlying that shows solid returns. Trying to simply substitute long options for a run-of-the-mill trade in the underlying is seldom profitable.
Might want to look into 2X-3X ETFs with good options volume. See if you can create something in that area.
It's a very insightful explanation of hedging when you own the underlying. If you don't own the underlying then the long put has the equivalent downside performance of shorting the underlying (underlying's price drops), less the premium paid for the put but without the so called 'unlimited upside risk' if it moves against you.Certainly an ET Best Of 2019 response. WAY big.
I can't go for that -- I get distracted by, "...as long as the delta is -1.0, and there is zero theta decay present"... (which there never is...). For some people, those are tiny details; for me, they're paramount.
Options are options..
You thought the idea of buying puts was x.... but its also y.
A true put seller never wants to exercise, just pure expired worthless contracts each month.
The only (HUGE) difference is insurance companies sell premium ABOVE fair value... Put sellers sell below fair value. Lol..
One of my rules was never to explain anything about options using puts... and selling puts is a 1,000 times worse. Double negatives - peoples brains explode.
...and saying a deep in the money call is a put, because a puts a call and a call is a put...
Yep, Phylo... Options are just options, like quantum field theory is just physics.
...and saying a deep in the money call is a put, because a puts a call and a call is a put...
Yep, Phylo... Options are just options, like quantum field theory is just physics.
Quantum field theory is just physics, black hole, that is another story.quantum field theory is just physics.
In the context of the OP who's asking if buying a put equates to short selling, it's an appropriate answer. What I should have specified was 'at expiration'. The downside profit (share price drops) of a long put at expiration is the same short stock less the premium paid. If you want to really dig deep, we can include borrow cost as well.
A trader who understands delta, theta and sorority girls is aware of the trade off between the two, prior to expiration.
Feel better now?