Replies to post #71580 on Zeev's Turnips Patch-No Politics (ZEEV)

[mlsoft]

Zeev...

Deep in the money puts are expensive, but they carry less premium for the time, thus providing more protection. A $25 put would have to eat through miles of premium before there was good protection.

Just a thought.

mlsoft

[fowler]

Rough equivalent of a short "price".

Of course you don't know if the trades were initiated as a buy or sell on the puts.

John

[mish]

There is almost no time premium on those. In fact there is no time premium whatsoever. There is a bid/ask differential but after that the puts would move identical to QQQ.
Those are so far in the money, however that there is no advantage over shorting. At $10 over, the same conditions would apply but you could leverage with twice as many. At 45, the amt of possible leverage would be rather small.
So all in all, after thinking about it, it seems rather strange, unless it it some sort of rydex play or something.

M