writing a put

0008 · Apr 23, 2023

If I write a put of QQQ at a lower price with the intention to buy the QQQ at that price, do I need to cut losses?

cesfx · Apr 23, 2023

I think it is similar to asking: "if I enter a buy limit order on QQQ at 290, do I need to limit my potential losses (eg use a stop loss)?"

It depends on your plan.

earth_imperator · Apr 23, 2023

0008 said:
If I write a put of QQQ at a lower price with the intention to buy the QQQ at that price, do I need to cut losses?

Nope. A nice scenario, indeed.
But it depends on the final value of QQQ. If it falls too much, then your "stock position" in QQQ will be in the reds, unhedged... But QQQ does not move that much in a short time frame, so the trade could be relatively safe...

newwurldmn · Apr 23, 2023

0008 said:
If I write a put of QQQ at a lower price with the intention to buy the QQQ at that price, do I need to cut losses?

as defined: no.

ETJ · Apr 23, 2023

Not unless you change your mind if put - we all know that never happens.

deaddog · Apr 23, 2023

0008 said:
If I write a put of QQQ at a lower price with the intention to buy the QQQ at that price, do I need to cut losses?

Why wouldn't you cut losses?

taowave · Apr 23, 2023

He wants to own it...

deaddog said:
Why wouldn't you cut losses?

taowave · Apr 23, 2023

Truer words never spoken..

ETJ said:
Not unless you change your mind if put - we all know that never happens.

deaddog · Apr 23, 2023

taowave said:
He wants to own it...

LOL.
You would think he wants to own winners.
You sell a put and get the premium and then get assigned. You now have a long position and ther is no reason to not cut losses.

taowave · Apr 23, 2023

Welcome to the world of value investing

deaddog said:
LOL.
You would think he wants to own winners.
You sell a put and get the premium and then get assigned. You now have a long position and ther is no reason to not cut losses.