2 ms·
Oh you're right, I misread the second half of that, thought it was buying puts.
by thebean11 6y ago
Oh you're right, I misread the second half of that, thought it was buying puts.
- benibela 6y agoI talked about both ways. Either buy the shares and buy an option as insurance, or only sell an option for the "pennies" In the first case, you can have unlimited profit if the stock goes up, a slight lose if it trades sideways, limited downside no matter how much it drops (or possibly profit, if you have a lot of options) In the second case, the steamroller is not so bad. If I am forced to buy above the market price when the option gets exercised, that is still below the marker price at the time I sold the option. Thus it is better than the alternative -- buying shares rather than selling the options. Then there is limited upside, limited downside, and a profit if it trades sideways