Put options

webpal

Has anyone ever bought stock long and then bought put options to protect the value? Just looking to see if it worked in reality or if not where it fell down.

neil.p.b

Never done it myself but it's a standard enough hedging strategy

delux

Never did that but I sell calls on stock I own for extra income. It won't make you rich but is kinda like extra dividends I find. I've never had any of the options exercised..seems true to me that >80% of options expire worthless so I'd rather be a seller than a buyer of options to have the odds in my favour.

arrowloopboy

If you want to explore options have a flick through:eek: Options as a strategic investment,its beside the bed for 3 months,afraid to open it ,its 1200 odd pages long,and not light bedtime reading,but as options go,its the bible.
I havn't gotten stuck in because i trade via spread betting ,i currently view options as a hedgeing tool used in conjunction with conventional stock/commodity trading(opinion may change when i'm better informed).

Mr.David

delux wrote: »

>80% of options expire worthless so I'd rather be a seller than a buyer of options to have the odds in my favour.

If that was the case it would be exploited and arbitraged away.....and you wouldn't have the odds in your favour.