No. of Recommendations: 1
I bought a put option 360 strike price (june 2024) for 23.15. I wanted to sell call option for strike price in 340-360 range but volatility pricing is low. So went for this. Not sure if it is one to one - but felt like this may be a better option than selling outright (it is in ira so tax was not a consideration).
My objective was to capitalize on low volatility and secure some profits, although I admit my reasoning is not fully developed regarding whether this strategy truly outweighs selling the stock outright.
Any thoughts. I can easily close it out if downside of this trade gets pointed out here.
No. of Recommendations: 2
"" but felt like this may be a better option than selling outright (it is in ira so tax was not a consideration)."" Good morning, are you bearish enough to buy puts? Why not sell say a 350 call, if it gets called, you'll make more than if you sold at 340 ish, and it's in your IRA so no taxable events? Good luck, but buying brkb puts, historically, has not been a profitable exercise.
No. of Recommendations: 0
If I interpret your post correcty, you are long the stock, and bought June 2024 $360 puts to protect profits against a temporary drop. This could work if there indeed is a temporary drop, and you can close the long put at a profit and then ride the stock back up unhedged.
Long stock + long put = long call ... so your new position is the equivalent of a long June 2024 call. If the stock drops, you don't lose except some time value. If the stock zooms past $360 you start partaking in the profits again.
