- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
re: Can Someone w/experience Tell me the negatives of deep out of the money puts
Posted on 6/14/13 at 12:55 pm to ThaBigFella
Posted on 6/14/13 at 12:55 pm to ThaBigFella
Scoop : AAPL :: ThaBigFella : PM
0
Posted on 6/14/13 at 1:03 pm to ThaBigFella
Just don't see why in 18 months if the stock price is below $70, you'd want to pay for it now. Sure, now you say you would, but if it $50-60, you really want pay $70, or you gonna be kicked yourself cause you could have gotten it cheaper.
The most you're gonna make on this position is $3850. If i were to get down in the in $60s uppers $50s, you're losing out on $10-$12k.
Options are used as leveraged position. Pay a premium, experience greater gains, but on the other hand, also amplified losses.
The most you're gonna make on this position is $3850. If i were to get down in the in $60s uppers $50s, you're losing out on $10-$12k.
Options are used as leveraged position. Pay a premium, experience greater gains, but on the other hand, also amplified losses.
This post was edited on 6/14/13 at 1:04 pm
Posted on 6/14/13 at 1:33 pm to southernelite
as someone whose owned this stock for nearly 2 decades, there is no driver on earth to put this stock in the $50-65 range. It would be a gift from the heavens to add this stock at $70 in 2 years.
The yield would be nearing 6%....its a stock im buying today with a 3.7% yield.
I am very bullish on this stock and think short of the greatest collapse the world will see, there is no way the shares are below $60 in 2015. JMO and of course I could be wrong and 2009 saw many blue chips with crazy yields, but im willing to bet that doesnt happen.
Like I said this is all crazy to me, seeing a 40% cash on cash return on apple $280 jan 2015 puts seems so so cheap, as im bullish on apple, selling options that far out at even $390 would yield 95% cash on cash, thats just nuts to me. I have no problem buying 100 shares of apple at $395 today and moreover i feel they will release some great things and add to their cash pile in the next 18 months so .....yes please?
The yield would be nearing 6%....its a stock im buying today with a 3.7% yield.
I am very bullish on this stock and think short of the greatest collapse the world will see, there is no way the shares are below $60 in 2015. JMO and of course I could be wrong and 2009 saw many blue chips with crazy yields, but im willing to bet that doesnt happen.
Like I said this is all crazy to me, seeing a 40% cash on cash return on apple $280 jan 2015 puts seems so so cheap, as im bullish on apple, selling options that far out at even $390 would yield 95% cash on cash, thats just nuts to me. I have no problem buying 100 shares of apple at $395 today and moreover i feel they will release some great things and add to their cash pile in the next 18 months so .....yes please?
This post was edited on 6/14/13 at 1:35 pm
Posted on 6/14/13 at 1:40 pm to ThaBigFella
So, you would get the difference if it's over what it's listed at now? So, if it higher, you would make money?
Posted on 6/14/13 at 1:42 pm to ThaBigFella
quote:
i feel they will release some great things and add to their cash pile in the next 18 months so .....yes please?
A bigger screen and new iOS is not going to move the stock price.
Posted on 6/14/13 at 1:49 pm to OnTheBrink
no but apple releasing any of a myriad of potential catalysts will
1)apple tv
2)cheaper iphone
3)deal with china mobile to carry the iphone
The itunes store alone generates $15,000/min or $15,000/sec i forgot... i read in barron's thats ridiculous
$280 is ridiculous are you serious, they have nearly $175 in cash today per share.....the stock isn't going to $280 in the next 18 months I don't care if earnings somehow drop to $30/share that's still a PE of 9 and factors no cash whatsoever
1)apple tv
2)cheaper iphone
3)deal with china mobile to carry the iphone
The itunes store alone generates $15,000/min or $15,000/sec i forgot... i read in barron's thats ridiculous
$280 is ridiculous are you serious, they have nearly $175 in cash today per share.....the stock isn't going to $280 in the next 18 months I don't care if earnings somehow drop to $30/share that's still a PE of 9 and factors no cash whatsoever
This post was edited on 6/14/13 at 1:53 pm
Posted on 6/14/13 at 2:02 pm to ThaBigFella
quote:
It would be a gift from the heavens to add this stock at $70 in 2 years.
Again, if the underlying security on the put is trading at $50, then no, that's not really a heaven send.
Posted on 6/14/13 at 2:16 pm to ThaBigFella
quote:
$280 is ridiculous are you serious, they have nearly $175 in cash today per share.....the stock isn't going to $280 in the next 18 months I don't care if earnings somehow drop to $30/share that's still a PE of 9 and factors no cash whatsoever
I guess a lot can change in a year...
Posted on 6/14/13 at 2:24 pm to OnTheBrink
I didn't see any of those catalysts at that time on apple
$300 is still not $270.....
as for PM
Are you serious? the dividend is $3.40 today and will be $3.75 this september and $4.15 at the least the following september so $50 in jan 2015 would be a yield of 8.3% at the least, I would sell everything I could to get a company with such a long dividend history and fantastic product at 8%+ dividend.....there is no way that would happen, there isn't short of a black swan event
$300 is still not $270.....
as for PM
quote:
Again, if the underlying security on the put is trading at $50, then no, that's not really a heaven send.
Are you serious? the dividend is $3.40 today and will be $3.75 this september and $4.15 at the least the following september so $50 in jan 2015 would be a yield of 8.3% at the least, I would sell everything I could to get a company with such a long dividend history and fantastic product at 8%+ dividend.....there is no way that would happen, there isn't short of a black swan event
This post was edited on 6/14/13 at 2:27 pm
Posted on 6/14/13 at 2:29 pm to ThaBigFella
Stop arguing on a message board and buy your puts!
Posted on 6/14/13 at 2:33 pm to LSURussian
isn't it sell your puts russian? 
Posted on 6/14/13 at 2:33 pm to LSURussian
quote:
buy your puts!
Posted on 6/14/13 at 2:37 pm to ThaBigFella
Are you writing the put contracts or buying contracts?
Posted on 6/14/13 at 2:43 pm to LSURussian
From what i've read around what im looking for is to "sell open" and collect the premium...
you're still my favorite poster russian
you're still my favorite poster russian
Posted on 6/14/13 at 2:45 pm to ThaBigFella
quote:
you're still my favorite poster russian
Posted on 6/14/13 at 2:51 pm to ThaBigFella
Cigarettes, which consumption in the US is going down and will have to rely on international growth is a "fantastic product". Sign me the frick up.
If you want to play with fire to make $3500 go right ahead, but it seems you're gonna get fricked doing this eventually.
If you want to play with fire to make $3500 go right ahead, but it seems you're gonna get fricked doing this eventually.
Posted on 6/14/13 at 2:52 pm to ThaBigFella
quote:You can do better....
you're still my favorite poster russian
Write your puts if you're so convinced you can't lose.
Posted on 6/14/13 at 2:53 pm to southernelite
quote:
Cigarettes, which consumption in the US is going down and will have to rely on international growth is a "fantastic product". Sign me the frick up.
If you want to play with fire to make $3500 go right ahead, but it seems you're gonna get fricked doing this eventually.
exactly why you shouldn't be commenting.....PM sells cigarettes in every country but the united states, you just lost all credibility. Smoking rates are actually rising across the world.....
and as for the US cigarette market consumption is down but due to nominal price increases Altria(PM parent company pre spinoff) is more profitable than ever
Phillip morris has had fantastic growth since its spinoff in 2008 go ahead and look at their chart before making some comment like that
Posted on 6/14/13 at 2:55 pm to wegotdatwood
quote:
So, you would get the difference if it's over what it's listed at now? So, if it higher, you would make money?
No, he's talking about selling puts. He gets to keep the amount that he sells them for, and as long as the stock price doesn't go below the strike price listed for the option, nothing else happens.
If the price does go below the strike, he may be forced to buy the stock at a higher-than-then-current-market price; what this discussion is about is whether that possibility is something to worry about, and whether the bird in the hand is a good bet considering the possible downside.
Posted on 6/14/13 at 3:01 pm to tokenBoiler
exactly im saying if the stock is a buy today @ $92.50 why the hell would it not be a buy at $50 or $60 or $70 in 2 years with 2 dividend increases. Im trying to gauge why more people dont use this strategy as I've been reading more and more about it in recent weeks
The returns are phenomenal on a cash for cash basis and the stock could even drop 20% in the mean time and I'd be ok
It is alot of money to commit per contract(100 shares) but if you're committing it anyways today, why not in the future at a lower price is my question
I get the downside of the stock being at $50 at that time, and Im telling you there is no way this stock will yield 8% EVER I dont care what your opinion is on smoking rates, name me one blue chip with a $100B+ market cap yielding 8% EVER?
I just sold a few @$3.85 for jan 2015 for a 50% ROI if they expire, bookmarking this thread, Im gonna give this a try and hopefully it doesn't bite me in the arse but worst case is I have to buy it for $22.00 less than today and keep another $3.85 per share in premium so im happy with my worst case
The returns are phenomenal on a cash for cash basis and the stock could even drop 20% in the mean time and I'd be ok
It is alot of money to commit per contract(100 shares) but if you're committing it anyways today, why not in the future at a lower price is my question
I get the downside of the stock being at $50 at that time, and Im telling you there is no way this stock will yield 8% EVER I dont care what your opinion is on smoking rates, name me one blue chip with a $100B+ market cap yielding 8% EVER?
I just sold a few @$3.85 for jan 2015 for a 50% ROI if they expire, bookmarking this thread, Im gonna give this a try and hopefully it doesn't bite me in the arse but worst case is I have to buy it for $22.00 less than today and keep another $3.85 per share in premium so im happy with my worst case
This post was edited on 6/14/13 at 3:07 pm
Page 2 of 3
Popular
Back to top
Follow TigerDroppings for LSU Football News