Section 1. Control Risk
"Why expose yourself to tremendous, and unnecessary, financial risk by owning totally unprotected stock positions when there is a way to limit risk without killing upside potential? Have the 'black swan' events of 1929, 2000, and 2008/9 taught us nothing about the market's penchant for punishing over-confidence? There is a way to buy, hold, and sleep easy, even in volatile markets."
'Married Puts' - foundation of a profit machine (part 1)
The 'married put' is a position which seems counterintuitive to the general optimism which accompanies a purchase of company stock but, like insurance, it pays to think ahead and to have a plan. 'Hope' is not a valid investment strategy.
This series of articles begins at an introductory level in part 1, but quickly progresses in subsequent articles to encompass more intricate details and several 'tricks of the trade' generally overlooked even by options experts. In fact, many 'experts' are more obsessed with complexity than in finding simple solutions.
The market often punishes even good stocks for no apparent reason, and a market-wide selling tsunami can 'sink all boats'.
Married Puts (Part 1) - READ FULL ARTICLE
'Married Puts' - foundation of a profit machine (part 2)
Continuing the Married Put Option strategy series, part 2 looks at intrinsic value, further reduction of risk, and choosing a strike price for stocks and options to include in a good business portfolio.
Options (Puts ancd calls) can be a minefield of complex terminology and inaccessible jargon. However, much of this lexicon is tossed around by 'experts' in order to justify their status as... experts! It is unnecessary and misguided to think that options are complicated and beyond the capabilities of most investors. Just the opposite is true - a little common sense and basic math applied to options pricing reveals a whole new world of opportunity and risk management potential for a good business portfolio of stock/option positions.
Married Puts (Part 2) - READ FULL ARTICLE
'Married Puts' - foundation of a profit machine (part 3)
How to time entry into a 'married put' position in order to achieve the lowest cost and minimum risk for a good business portfolio. There is never a 'perfect' time, but there are opportunities to optimize an entry point into a stock and put option position. The optimum timing, however, is often COUNTER-INTUITIVE for most investors and even seasoned options traders.
Remember the basic premise of these strategies...
- 1. Risks are limited and managed.
- 2. Basic costs are quantified and fixed.
- 3. The 'product' is 'liquid' and in demand.
- 4. There is a solid foundation, and core business.
- 5. Overheads are controlled and kept to a minimum.
Married Puts (Part 3) - READ FULL ARTICLE