So I bought S&P 500 2500 puts

bobandsherry said:
Seems if someone really was expecting a drop they'd buy something like a 260, cost a couple $$ more but then lots of coverage on the downside, break-even around $255 (based on March 29 option) vs $244 b/e for 247 option.

Rough #'s on 1 contract (SPY 3/29 expiration):
260 - $491
Value at $244 = $1,600 / Net = $1,109

247 - $238
Value at $244 = $300 / Net = $62
Click to expand...
Those who were considering buying a put for downside protection, the price of entry is now significantly lower. 260 now $384 (22% lower) and 247 is $171 (28% lower).
 
I would wait I think. Amazon reports after hours today and by all indications is going to be a big quarter, probably going from $1700 a share to $1800 in after hours trading. This will make for a strong start to Friday, likely pushing the S&P500 up another dollar or two.

I guess the market really does like to climb a wall of worry.
 
gstillson said:
I would wait I think. Amazon reports after hours today and by all indications is going to be a big quarter, probably going from $1700 a share to $1800 in after hours trading. This will make for a strong start to Friday, likely pushing the S&P500 up another dollar or two.

I guess the market really does like to climb a wall of worry.
Click to expand...

That's the funny thing about earnings. It isn't just whether they are good or not good, it is also a factor of the run up or down into the earnings and the company future guidance. Amazon moved from $1307 on the Christmas eve massacre to the $170+ range, a 26% jump. Then the earnings and a pop followed by a dump. So, Amazon did change price by about $100/share, just in the opposite direction.

I'm not trying to pick on you, I've certainly had my share of unexpected results after earnings release on stocks I hold.

This is one of the reasons I don't try to play earnings reports. Look for good entry points to establish a position and just go with it.
 
Running_Man said:
I was waiting to see what the Fed would do, and they indicated they are ending sales of bonds, will probably declare victory against inflation and calling the operations a success. With the 20+ dollar jump in gold prices it appears to me the recovery reaction from the December low is coming to an end. However, I am not selling my stocks as if we were to get into an inflationary binge or the FED jumped up SPX purchases --- there are now calls for investigating the December decline as unfair to investors --- when selling is becoming a crime in the world of stocks --- well I'll leave it there but I view that as a bad sign when people think of a decline as a crime that the government needs to address. In any case there could be emotional increases that I cannot afford to miss.
Click to expand...

Running man, are you still around still invested about 25% long in your portfolio? Just curious.
 
copyright1997reloaded said:
That's the funny thing about earnings. It isn't just whether they are good or not good, it is also a factor of the run up or down into the earnings and the company future guidance. Amazon moved from $1307 on the Christmas eve massacre to the $170+ range, a 26% jump. Then the earnings and a pop followed by a dump. So, Amazon did change price by about $100/share, just in the opposite direction.

I'm not trying to pick on you, I've certainly had my share of unexpected results after earnings release on stocks I hold.

This is one of the reasons I don't try to play earnings reports. Look for good entry points to establish a position and just go with it.
Click to expand...

Yes but the market didn't go down, the S&P puts actually lost value.
 
Rowej said:
Running man, are you still around still invested about 25% long in your portfolio? Just curious.
Click to expand...

I am still invested 25% long in stocks — so far in 2019 my main move has been to sell 1/3 of my index holdings and replace with 8 individual stocks. As far as further postings I will post when I sell my puts that I own, I plan on keeping the 5% portfolio thread updated, may comment once in a while in the preferred index thread as that is an extraordinarily good thread and that is about it, I have no interest in participating in new threads that hammer the same quotes on passive index investing.
 
I think markets have reached a top. I have sold most of my equities. Down from 50% allocated last month to 10% allocated this month. I dont trust this market anymore.
 
This thread had the markets reaching a top and then it went up another 7% from there. So which top is it? The real top or the top that isn't really a top?
 
Depends on your time horizon? ST in the SPY I like 275,264,250 and up above I like 281, 287 and 320.
 
I sold 1 SPY 250 Dec 2019 for $8.5 on Friday. I think I would rather sell PUTs than outright buy. My plan is to accumulate short PUTs for 50% of my target allocation and the remaining 50% I will wait for an actual dip to buy SPY.
 
revhappy said:
I sold 1 SPY 250 Dec 2019 for $8.5 on Friday. I think I would rather sell PUTs than outright buy. My plan is to accumulate short PUTs for 50% of my target allocation and the remaining 50% I will wait for an actual dip to buy SPY.
Click to expand...

You do realize that selling a put is a bullish position and has the potential for enormous losses if the market really went off a cliff (like a 40% drop).

If the S&P500 were to end 2019 at something like 150 then you would lose $10,000 (minus the $850 you got for the put)
 
Rowej said:
Running man, are you still around still invested about 25% long in your portfolio? Just curious.
Click to expand...
Yes with present market increase and the purchase of a several individual stocks of 2% of portfolio individual, actually at present a few percent above 25%.
 
revhappy said:
I sold 1 SPY 250 Dec 2019 for $8.5 on Friday. I think I would rather sell PUTs than outright buy. My plan is to accumulate short PUTs for 50% of my target allocation and the remaining 50% I will wait for an actual dip to buy SPY.
Click to expand...
Did you mean you bought a put? If not, well you may be in for a bit of a surprise.
 
bobandsherry said:
He did? Not what i read.
Click to expand...
"I sold 1 SPY 250 Dec 2019 for $8.5 on Friday"

All he's saying is that he's willing to buy 100 shares of SPY at 250 before December. And he's getting paid for that. Isn't that correct?
 
bmcgonig said:
"I sold 1 SPY 250 Dec 2019 for $8.5 on Friday"

All he's saying is that he's willing to buy 100 shares of SPY at 250 before December. And he's getting paid for that. Isn't that correct?
Click to expand...

I know what he wrote, but he also said " I will wait for an actual dip to buy SPY." So unclear what they intended by the Put. You could def be right just wasn't clear to me what he was looking to accomplish. If S&P drops to 2,300, he's on the line to pay 2,500. Whatever it is, I wish him luck.
 
bobandsherry said:
I know what he wrote, but he also said " I will wait for an actual dip to buy SPY." So unclear what they intended by the Put. You could def be right just wasn't clear to me what he was looking to accomplish. If S&P drops to 2,300, he's on the line to pay 2,500. Whatever it is, I wish him luck.
Click to expand...
"I will wait for an actual dip to buy SPY."

The put is allowing him to wait. Buying the put and waiting to buy are both consistent statements with waiting for a 10% pullback to buy. Of course it could keep going down after that.
 
You must log in or register to reply here.

Similar threads

F
Advice needed
Replies
3
Views
313
Jerry1
Jerry1
S
  • Locked
LTCG Harvesting
2
Replies
33
Views
2K
Original Wally
O
walkinwood
Larry Swedroe on the Problems of High US Equity Valuations
Replies
22
Views
2K
RobLJ
R
C
Retirement investing strategies - Liability Driven Portfolio - income from rotating bonds, rest in stocks/etc. - Is it a good method?
Replies
4
Views
268
cargocar123
C
braumeister
State Income Tax: not always perfect
3 4 5
Replies
105
Views
4K
athena53
athena53

Latest posts

Back
Top Bottom