writing a put

Discussion in 'Options' started by 0008, Apr 23, 2023.

  1. deaddog

    deaddog

    I tried that years ago, couldn't stand the wild ride up and down. :)
     
    #11     Apr 23, 2023
  2. TheDawn

    TheDawn

    Yes because you will be suffering an instant loss once you get assigned to buy at the strike price when the market price will be much lower. As long as you are prepared for that, you will be fine. Unless you intend to hold the stock for the long term and is prepared to deal with the downtrend in the "short-term", you will need to cut losses or at least at some time if the stock is not recovering within your expected timeframe.
     
    Last edited: Apr 23, 2023
    #12     Apr 23, 2023
  3. TheDawn

    TheDawn

    Well if his intention is to really own the stock for the long term, he can simply buy a put to hedge or write a call on it to earn some premium while the stock is going through a short-term downtrend.
     
    #13     Apr 23, 2023
  4. deaddog

    deaddog

    So you don't think a trader should cut losses?
    What is the long term? How long do you tie up your capital that could be earning a better return?
     
    #14     Apr 24, 2023
  5. TheDawn

    TheDawn

    When he sees it's no longer justified to hold the stock in the portfolio, yeah sure.

    Depends on your outlook for the company and its stock. I don't have a definite answer.
     
    #15     Apr 24, 2023
  6. deaddog

    deaddog

    At what point do you know you are wrong about your outlook for the company and its stock?

    A lot of investors hit that point and continue to hold the stock for what ever reason. No one lies to themselves more than an investor underwater.
     
    #16     Apr 24, 2023
  7. taowave

    taowave

    Heres the thing,he is writing a put on QQQ...IMO thats much different than writing a put on a stock..
     
    #17     Apr 24, 2023
  8. deaddog

    deaddog

    Why?
     
    #18     Apr 24, 2023
  9. destriero

    destriero


    SN (company-specific) risk.
     
    #19     Apr 24, 2023
  10. zdreg

    zdreg

    Relatively safe in the stock market is non-existent.
     
    #20     Apr 24, 2023