Options Bootcamp 20: Options in Lieu of Stock
Basic Training: We present two choices for using options in lieu of stock:
Stock Replacement Strategy.
- How does it work? Examples include:
- An ITM leaps call purchase - requires premium over parity payment
- Selling a one month ITM put - for the more options savvy trader.
- By swapping out a LEAPS for an underlying, you get a much more preferable position from a Greeks perspective.
Stock Repair Strategy
Under the right set of circumstances, it can be very useful and practical. Appropriate for stocks that fall in value of 20-30%, that you feel within a few month can recoup half of it losses. How does it work?
Mail Call: Bootcampers get their questions answered.
- Question from M Higgins: My financial advisor is not a big fan of options. He keeps trying to steer me into annuities and life insurance policies instead. What do you guys of those products as investment vehicle instead of using options?
- Question from Mr. Anonymous: I've heard a number of options traders, including hosts on this network, use the term "legging" when referring to options trading. What does this term mean? Thanks for your help and for all of your fine options content. The Options Insider Radio Network is truly a unique options content destination for options traders.
- Question from T Biz: What do the drill instructors think of the potential jumbo/max S&P contract?