Home > Boards > Free Zone > Options Only > Option Education

Hi bkluck

Public Reply | Private Reply | Keep | Last ReadPost New MsgNext 10 | Previous | Next
Toofuzzy Member Profile
Member Level 
Followed By 39
Posts 6,799
Boards Moderated 2
Alias Born 02/20/02
160x600 placeholder
Toofuzzy Member Level  Saturday, 07/26/14 12:51:35 PM
Re: bkluck post# 571
Post # of 623 
Hi bkluck

You may want to sell a slightly out of the money put instead. You will take in more TIME premium (though lower actual premium) and you will need just a little less margin in your account.

Lets say a stock is at 50 and you are willing to buy at 45 and you are also willing to buy even more at 40

Sell a 45 put six months or a year out.

If the stock drops to 45 before expiration, buy the stock, it may go back up before expiration and you would miss the opportunity.

If it stays down till expiration or drops further you would have bought more at 40 and hopefully you took in enough premium to bring the price down to that or close.

The above assumes you have enough funds for an additional purchase.

Toofuzzy

Take the road less traveled. It will make all the difference.
Public Reply | Private Reply | Keep | Last ReadPost New MsgNext 10 | Previous | Next
Follow Board Follow Board Keyboard Shortcuts Report TOS Violation
X
Current Price
Change
Volume
Detailed Quote - Discussion Board
Intraday Chart
+/- to Watchlist