Re:A Tiny Hedge Fund Made 8,600% on a Vix Bet
by lodi on Saturday February 10, 2018 @06:39PM
(#16350284)
Why would you sell a naked put though? Sell a put spread (e.g. short 155 put, long 150 put) and you can exert extremely fine control over your max liability. $500 per contract in the aforementioned case.
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Re:A Tiny Hedge Fund Made 8,600% on a Vix Bet
by dragontamer on Sunday February 11, 2018 @12:42AM
(#16351379)
> extremely fine control over your max liability
Alternatively, I may want to own shares because I'm a buy-and-hold investor. An out-of-the-money call solves the FOMO problem.
The "risk" of a naked put is that you might be forced into buying shares. Well, that's fine. I'm a buy-and-hold, relatively conservative investor. I was planning on buying those shares anyway.