NW-Bound
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Jul 3, 2008
- Messages
- 35,712
The upside is limited to the premium I received. The ultimate downside is I lose all of the cash to secure that put if the S&P goes to 0 (100% loss). It's not a straddle.
The S&P was at 2640 when I sold the put to buy it at 2560 or 3% less. If it drops 500 points to 2140, that means I will have to pay 2560 for a stock worth only 2140. That is a 16.4% loss (not counting the premium). But that loss is on this bet, and this bet only.
The S&P was at 2640 when I sold the put to buy it at 2560 or 3% less. If it drops 500 points to 2140, that means I will have to pay 2560 for a stock worth only 2140. That is a 16.4% loss (not counting the premium). But that loss is on this bet, and this bet only.
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