Protective Puts (Week 11 of 12) | Getting Started with Options | Barbara Armstrong | 7-16-24
Вставка
- Опубліковано 16 жов 2024
- Getting Started with Options: Protective Puts (11 of 12) | Barbara Armstrong | 7-16-24
Characteristics and Risks of Standardized Options. bit.ly/2v9tH6D
Concerned about how an upcoming event, such as an earnings announcement, product launch, regulatory approval, or legal action, might impact the price of your stock in a negative way? Join this episode to learn how protective puts can help mitigate the potential damage a negative market reaction may create in your portfolio.
In this webcast, we introduced the concept of using a long put for protection of a long stock position which is known as a protective put. We compared the use of stop losses vs protective puts and the pros and cons of each. We also placed an example trade on the thinkorswim paperMoney platform.
Options carry a high level of risk and are not suitable for all investors. Certain requirements must be met to trade options through Schwab. Please read the Options Disclosure Document titled "Characteristics and Risks of Standardized Options" before considering any option transaction.
To follow Barbara Armstrong on X: @BarbArmstrongCS
(Scripts are for educational purposes only, are not a recommendation, and are not guaranteed for time or accuracy.):
1 MO: tos.mx/RyY3kRp
3 MO: tos.mx/O0nGkGY
6 MO: tos.mx/LTe5nkk
New to Options? Starting Here! Getting Started with Options: The Basics: www.youtube.co...
Trading A Smaller Account: The Psychology of Trading, Position Sizing and Trade Management: www.youtube.co...
Trade Management Mini Sessions: • Trade Management Mini ...
Here's the link to the new Schwab coaching calendar: www.schwab.com...
Link to the Trader Talks Webcasts from Schwab Coaching on UA-cam: / @tradertalkswebcasts
#barbaraarmstrong #TraderTalks #SchwabCoaching
Barbara you the best.
Thank you sir. ^Barb
Great class.
In your example with CRM, the stock gapped lower -> the value of the Put increased. So, you outline two options: a. exercise the option and sell the stock at the strike price or b. sell to close the Put option and collect the increased in value of the Put (bought at 3.7 sold for 42).
Can a trader do both -> sell to close option (collect approx 38 ) AND sell the stock at 260?
Sadly....no. If the trader exercises the option, they could have sold CRM at 260. If they chose to sell the option, instead of exercising it, they would have a nice profit on the sale of the put but if they sold the stock, it would have been far below the 260 strike if they sold it that same day. ^Barb
Is it impractical or too expensive generally to buy a protective put in an index like SPY or QQQ in order to at least partially protect the value of an entire portfolio that you have held for a long time with significant gains from a big correction or sudden steep overall market drop? I am interested in pursuing something like that but I have no experience in options. I found this webinar on the Schwab website and it seemed like the closest idea to what I was looking for. There may be a better or more efficient way to do this. I have an idea that it may be too expensive with anything other than short term expiration dates.
Great question. There are some who might consider using futures to achieve that end. James Boyd teaches a class of Futures Thursday mornings at 9:30 ET. Here's a link to that series. Portfolio protection has been a topic recently. ua-cam.com/play/PL8a6s5nq1lPSzCq7becgRKmaSausE1qJo.html&si=eR04UdY2A5FXZ2VX ^Barb
Hey is this TD ?
No, it is now Schwab. Schwab purchased TD Ameritrade in 2019. The integration in now complete. Welcome! ^Barb