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My 31 yr old friend and his portfolio My 31 yr old friend and his portfolio
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02-11-2009 , 12:42 PM
#201
durkadurka33's Avatar
durkadurka33
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Carpal \'Tunnel
Join Date: Apr 2008 Posts: 8,709
Yeah, because I was talking about SPY and never said that the index will 100% always recover...douche, thanks for your lack of meaningful contribution...again.
My 31 yr old friend and his portfolio Quote
02-11-2009 , 01:36 PM
#202
tempest7178
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journeyman
Join Date: Apr 2004 Posts: 291
Quote:
Originally Posted by durkadurka33
Yeah, because I was talking about SPY and never said that the index will 100% always recover...douche, thanks for your lack of meaningful contribution...again.
I'd rather you namecall than give out more poor information.
My 31 yr old friend and his portfolio Quote
02-11-2009 , 02:26 PM
#203
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Brons
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Too be fair I agree with durkadurka33 that it's probably safer to write puts on SPY than on some random stock. Also, if you think the S&P is going to be flat/down until the end of time you have no business in the market at all and shouldn't write puts in the first place.
My 31 yr old friend and his portfolio Quote
02-11-2009 , 05:59 PM
#204
dibsy
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Quote:
Originally Posted by Brons
This is a great strategy until it isn't.
Well the idea here applies to someone who wants to get long the market. When this "isn't" just means that you are now long the S&P at a point 20% lower than original planned entry point, all the while having earnt put premiums in the process. The risk to this strategy is that the market skyrockets and end up making less than what you would have if you bought equities outright.

It is not for someone who is doing it to live off the premium and has no intention of owning the S&P.
My 31 yr old friend and his portfolio Quote
02-11-2009 , 10:03 PM
#205
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durkadurka33
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Carpal \'Tunnel
Join Date: Apr 2008 Posts: 8,709
Quote:
Originally Posted by dibsy
Well the idea here applies to someone who wants to get long the market. When this "isn't" just means that you are now long the S&P at a point 20% lower than original planned entry point, all the while having earnt put premiums in the process. The risk to this strategy is that the market skyrockets and end up making less than what you would have if you bought equities outright.

It is not for someone who is doing it to live off the premium and has no intention of owning the S&P.
Yup, this is also why the strategy is good but it's better as part of an overall strategy. If you think the overall odds of a significant drop are low, it's a great way to pick up 'easy' money on the side with part of your portfolio, while the rest is going into the upside potential.
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