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primaus72

3,200 Posts.

95

03/06/20

19:38

Post #: 45018005
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Originally posted by timbuckley: ↑

@primaus72 If you hold stock, why not write calls over your holdings instead of putting yourself at risk with buying any option at all and esp puts?
If you hold stock, you can write a covered call, get the premium and if you get called up you are selling your shares at a high price which would be at a level which, when exercised, you dont care because it will be at the top of the range and you know you can rebuy on market at a lower price at some point in the future. And if you arent called up, you hold the shares and keep the premium and do it all again.
Easy money if you have the stock behind it and a guaranteed money making trade regardless of getting called up or not.

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I used to do it this but covered calls don’t have the leverage + i don’t really want to take a long position on a stock which i am bearish on

Under APT bear spread.. buy 150 contracts at $60 then sell 150 at $55 for july expiry

price for buy is $1.95 and sell $3.30

Break even $58.3
Max loss 25k
Max profit 20k

but a ridiculous commsec margin requirement of $144k!

XJO Value at posting: 5,941.6
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