10-12-2009, 02:10 PM
The other option is to write a covered call: instead of paying the premium for the right to sell (PUT), you recieve the premium however you're now obligated to sell.
A much better 'sideways' strategy if you think AAPL's going to take a breather for a month but you still want to make $ w/ your shares.
To add to your previous point, I'd have set a 'Stop Market Order' just above the resistance so you do't loose the entire premium you paid for you Put.
Additionally, if you're long on a position you probably know the majority of consolidation points along the way where the stock could revers/retrace... that's when you hedge your position because the $1500 you'd loose (assuming you didn't place your stops) is worth the thousands you saved... as well as a bit of security of mind.
Hedge on stock you own (or a LEAP Option):
1) Protective Put (pay a premium); strat for retracements
2) Covered Call ( recieve a premium);strat for retrace/consolidation move
A much better 'sideways' strategy if you think AAPL's going to take a breather for a month but you still want to make $ w/ your shares.
To add to your previous point, I'd have set a 'Stop Market Order' just above the resistance so you do't loose the entire premium you paid for you Put.
Additionally, if you're long on a position you probably know the majority of consolidation points along the way where the stock could revers/retrace... that's when you hedge your position because the $1500 you'd loose (assuming you didn't place your stops) is worth the thousands you saved... as well as a bit of security of mind.
Hedge on stock you own (or a LEAP Option):
1) Protective Put (pay a premium); strat for retracements
2) Covered Call ( recieve a premium);strat for retrace/consolidation move
GW2_Guardian
SWtOR_Marauder
WAR_White Lion_Iron Rock
Amins_WOW_Shaman_Crushridge
Aminion_DAOC_RM_Mid/Guin
Bnobo_Dark Ages_Monk/Rogue
SWtOR_Marauder
WAR_White Lion_Iron Rock
Amins_WOW_Shaman_Crushridge
Aminion_DAOC_RM_Mid/Guin
Bnobo_Dark Ages_Monk/Rogue