Let's Talk About Option Trading Strategies............. (calls, puts, buying, sell)

[Quaker15]

GE is now at $25.83. Let's say that I expect it to go up within the next couple of weeks. I would do the following:

Buy to Open Call for $0.80 for strike at $25.50 expiring in Jan 23, 2015.

To put an insurance on it, I would also do the following:

Buy to Open Put for $0.10 for strike at $23.00 expiring in Jan 23, 2015.

Anyone using this strategy?

[Lowexpectations]

The puts wouldn't be any insurance against your calls.

[Quaker15]

Yes, it would. If GE goes to $20 in the next two weeks, you got yourself covered.

[Lowexpectations]

Originally Posted by Quaker15

Yes, it would. If GE goes to $20 in the next two weeks, you got yourself covered.

If it goes below 23. What if it only goes down between 25.50 and 23? How much insurance were those puts ? Even at 22.10 with no time value you'd still not make anything

[Quaker15]

Originally Posted by Lowexpectations

If it goes below 23. What if it only goes down between 25.50 and 23? How much insurance were those puts ? Even at 22.10 with no time value you'd still not make anything

It's insurance, it's not free lunch regardless of whatever happens?

[bmw335xi]

You need to show some gratitude first, I urge all members to ignore this thread until that happens Merry Christmas

[Quaker15]

Everyone, thanks for posting on my thread. Please make sure your posts can be understood.

[Lowexpectations]

Originally Posted by Quaker15

It's insurance, it's not free lunch regardless of whatever happens?

It's a terrible strategy

[Quaker15]

Originally Posted by Lowexpectations

It's a terrible strategy

What's your insurance for buying a Call Option then?

[Lowexpectations]

Originally Posted by Quaker15

What's your insurance for buying a Call Option then?

I don't buy calls. If I was going that direction I'd sell puts.

My strat is selling covered calls and overtime I will make more money than most call buyers