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Buying naked puts. It is like shorting but very leveraged and must be timed.
by Lost_BiomedE 9y ago
Buying naked puts. It is like shorting but very leveraged and must be timed.
- eru 9y agoI wonder if you turn writing naked puts into something like value investing? Figure out from fundamental what you think is a decent value for the stocks in question, then write puts for that strike price.
- Lost_BiomedE 9y agoI do something like what you are saying but with selling covered calls while I am long a stock. A quick search online will show you strategies like this. It is not uncommon for more active equity traders. I mostly play long cycles in the equity market instead of trading. When I do trade equities, I play one or two stocks that I know their behavior intimately. My very active trading is mostly in futures and currencies.
- eru 9y agoYeah, thanks to put call parity a covered call and a naked put are basically the same thing. (I wonder if it's in some more general sense similar-ish to lending out your long equity to short sellers?) Having said all that, I'm an indexer at heart, and working for Bloomberg I'm not even allowed to trade the more interesting stuff.