Synthetic straddle? I guess it works well for large directional moves, but costs theta in a range bound market.
Maybe it has to do with below? I have been waiting for gap down day, but it’s not happening … just orderly selling/rotation. No panic out there, at least not yet. https://www.elitetrader.com/et/threads/cramer-brilliant-vix-insights.364390/
Calm down Nine_Ender, I worry you are going to have a heart attack with that blood pressure spiking like that LOL. I bought the TQQQs when the market was going up. But I wanted to protect myself for just something like this fall that is happening, because as we all know it can happen any time. So I bought the far out of the money puts, which were cheap (given at the time VIX was relatively low), as I can stomach a small/regular loss all day, but I didn't want an account wipe out like 2008. That was my thinking. I'm just asking why they are not up more than they are, seems a bit weird to me. Thanks!
Oh they were many months away, at least 7 or 8 months I would say. Some longer for sure, like a year out. Thanks!
Next time, go back to basics and consider just setting a stop loss. A lot more efficient than trying to protect an existing position with long puts. You could have set an emergency 10% stop on your TQQQ, and been out of it a long time ago, now sitting in cash.
What on Earth are you talking about? Are you saying I, as the purchaser of the put, cannot exercise the put when I want? What?
Are you sure about that lindq? Stops have their own sets of problems, i.e. huge potential whipsaw. Is there any definitive studies that show stops are better than deep in the money puts over the long run? I.E. they protect you as good or better and your average annual return in the market is as good or better? Thanks.
No, when you sell to open a put/call, you cannot exercise it. The buyer can! in a spread you have sold one, I'd guess...
No Tim, I bought the put. Not sure where the sell idea got out there. I own the put and the put right. T