Why the heck are my QQQ put options not up more?

[LM3886]

buy calls, hedge delta->win through vol and skew

Synthetic straddle? I guess it works well for large directional moves, but costs theta in a range bound market.

 

[qlai]

I would have thought given the new hysteria in the market they would have become more pricey.

Maybe it has to do with below? I have been waiting for gap down day, but it’s not happening … just orderly selling/rotation. No panic out there, at least not yet.
https://www.elitetrader.com/et/threads/cramer-brilliant-vix-insights.364390/

 

[SoyUnGanador]

Why the hell would you have TQQQ right now if you think QQQ is going down ? And why are you buying options you don't understand at all ? You could in fact see your puts go to zero later this year and lose money on your TQQQs.

Calm down Nine_Ender, I worry you are going to have a heart attack with that blood pressure spiking like that LOL.

I bought the TQQQs when the market was going up. But I wanted to protect myself for just something like this fall that is happening, because as we all know it can happen any time. So I bought the far out of the money puts, which were cheap (given at the time VIX was relatively low), as I can stomach a small/regular loss all day, but I didn't want an account wipe out like 2008.

That was my thinking. I'm just asking why they are not up more than they are, seems a bit weird to me.

Thanks!

 

[SoyUnGanador]

How many days till expiration were the puts when you bought them? If they were just a few months away from expiration then they might have lost much time value during the process. Might be a good idea to buy the leaps if deep OTM for enough protection.

Oh they were many months away, at least 7 or 8 months I would say. Some longer for sure, like a year out. Thanks!

 

[TimtheEnchanter]

The short leg can be only exercised by the writer, not you!

 

[lindq]

I was just doing it to hedge my TQQQs. You are calling that a mistake, but SHOULD work out nicely, if the market continues to go down they SHOULD (I think) go up considerably, offsetting my losses on the TQQQs. In theory anyways haha.

Next time, go back to basics and consider just setting a stop loss. A lot more efficient than trying to protect an existing position with long puts.

You could have set an emergency 10% stop on your TQQQ, and been out of it a long time ago, now sitting in cash.

 

[SoyUnGanador]

The short leg can be only exercised by the writer, not you!

What on Earth are you talking about? Are you saying I, as the purchaser of the put, cannot exercise the put when I want? What?

 

[SoyUnGanador]

Next time, go back to basics and consider just setting a stop loss. A lot more efficient than trying to protect an existing position with long puts.

You could have set an emergency 10% stop on your TQQQ, and been out of it a long time ago, now sitting in cash.

Are you sure about that lindq? Stops have their own sets of problems, i.e. huge potential whipsaw. Is there any definitive studies that show stops are better than deep in the money puts over the long run? I.E. they protect you as good or better and your average annual return in the market is as good or better?

Thanks.

 

[TimtheEnchanter]

What on Earth are you talking about? Are you saying I, as the purchaser of the put, cannot exercise the put when I want? What?

No, when you sell to open a put/call, you cannot exercise it. The buyer can! in a spread you have sold one, I'd guess...

 

[SoyUnGanador]

No Tim, I bought the put. Not sure where the sell idea got out there. I own the put and the put right.

T