I'd like an opinion on this trade

Discussion in 'Options' started by xeys_00, Oct 9, 2011.

  1. xeys_00


    Selling the ATT (T) 27 puts for Oct 22. I don't want to be assigned. It seems to have good support above 27. Ideas? Thanks in advance.
  2. ASE1245


    You know earning are Oct 20th and your selling only a .14 put. There must be a better sale to make. The put will still have a value Oct 19th with 3 days to expiration. I don't like it.
  3. oraclewizard77

    oraclewizard77 Moderator

    Buy the Oct 25 puts for protection against bad earnings.
  4. If a person owns say 1000 shares of T, is it typical to buy 10 puts for protection ?

    Dont you get in the way of profits that way?

    Never understood if hedging was ever worth it.
  5. ammo


    T doesn't move much,it's like a utility so hedging would be overkill,but if it were aapl or bidu,or goog, and your losses would be large if wrong...different story..hedge would be limiting risk and keeping the clearing firm off your back(long cheap puts and/or calls for a disaster)
  6. xeys_00


    I guess I missed out, the puts are worthless almost now... I guess I'll try to think of something else. Thanks anyways tho.
  7. Wall Street's philosophy centers around the hedge ratio for options, and they only look at buying options as insurance that costs around 300 basis points or 3% of the portfolio per year without a full on completely delta neutral hedged porfolio.