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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
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Author: Mark   😊 😞
Number: of 19823 
Subject: Re: OT: Predictions from US/Israel bombing of Iran
Date: 04/09/26 11:26 PM
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<<I tend to buy such put options in pairs. For example, buy one 20% below current price and [sell] an equal number at (say) 40% below, against the same security expiring at the same date. I don't really want to wager on drops of more than 40%, they are a bit of a long shot, so I can use the premium from those low-strike ones to help pay for the high-strike ones. At first this sounds insanely risky, who would write put options? But it's entirely safe so long as you close them at the same time. If/as your low-strike ones start losing money, the high strike ones will be making more money. So never close the high strike ones first.>>

Maybe I’m misunderstanding this, but it only makes sense to me if I add the important word I have provided above. Is that what you meant?


Sounds like a "bear put spread" to me - https://www.investopedia.com/terms/b/bearputspread...
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