re: re:trading for a living - timmonogy Well what a great post ! this is the first time I have seen some one hightlite a situation where buying puts is a viable trading stratergy.
What you are doing is effectively buying an insurance policy to protect your capital in a stock you think is going up ? that should be going up ? but isnt due to some unknown reason.
Its like buying a brick house ? you dont think it will burn down but the risk v premium says you will just in case.
I have stated this many times on h/c when other posters highlight the increasing number of short positions on HDR.
Its an unreliable guide as to the direction of any given stock HDR has less than 1/2 a % of shares on issue short sold ? compare this with ZFX which has 3% of shares shares on issue short sold.
I agree totaly with buying puts as a viable stratergy as implementing stops in certain cases.
HDR would appear to be well oversold and anyone who has been stopped out runs the risk of having to buy back in at much higher prices on the release of any good news < not to mention being out of the stock if an opportunistic t/over were to occur ?
Remember what happened to Virgin when the price tanked after a bad set of numbers ? Yes thats right their largest shareholder PRK swooped. That may well prove to be a bad purchase but HDR must surely be on China,s radar at under $2 ? they could pay $3 which would be a 50% premium to current share price and it would be a bigger bargain than when Xstrata took out MIM.
HDR
hardman resources limited
