Options Bootcamp 71: Protecting Your Gains Using Options
Options Boot Camp is designed to help get you into peak options trading shape by teaching you options trading inside and out, basic to complex. Listeners can even submit their own options questions to be answered on the program.
Basic Training: A Review of How to Protect Your Profits
Easiest method: Buy a 2-3 month put ATM or slightly an OTM put.
Protect just those gains.
What do you do if you have a broad portfolio?
Hedging Rule of Thumb. Expect to spend about 2% of your
portfolio for effective 3-6 month protection.
How do you reduce the cost of protection?
Buy a spread instead of an outright put, set up a collar, or
set up a collar with a kicker.
Mail Call: It's time for listener questions
Question from Ariell - Why should I ever buy puts? I can use a
stop order in the stock for free and then put that extra capital to
work in my trading account. By my math using stops instead of puts
can boost your account 5-10% per year. That's a lot of cheese.
Question from S_Warz - Do you trade options through dark
pools
Question from Thankfulness - Do you have dark pool access?
Comment from H. Schwartz - Who said option traders don't
celebrate holidays!
Question from L. Penguin - I have a question for the Options
Bootcamp. I'm a new options trader and I want to buy a LEAP call
because it looks like the stock is going to go to up in the next 12
months, but I don't want to commit yet. I also want to generate
income while I hold that position. What are your thoughts on
selling the call while I have the leap? Also, this stock has an
attractive dividend that I'd like to capture. Is this even
possible? Interested in your thoughts, thanks!...I was thinking
about buying a deep in the money call for the LEAP, and then
depending on where the stock is trading at the time, sell closer to
the money.
About the Podcast
Options Boot Camp is designed to help get you into peak options trading shape by teaching you options trading inside and out, basic to complex. Listeners can even submit their own options questions to be answered on the program.