Buying puts is bearish, selling puts is bullish. Selling a put at a lower price than the current price locks in that price for the underlying if and when the option is assigned when the underlying reaches/goes below the strike price, if that is what is desired. You also collect premium while you wait until the prices reaches the strike price. If it never does, you just continue to roll your puts to the next month, collecting additional premium.
Howdy!
2009/5/24 Sandra McMakin <s.mcmakin@comcast.net >:
> What does this mean? Is he expecting another quick market drop in the near
> future?
If he is expecting a market drop he would be buying put options not
selling them. You are giving us interesting information. Please
share more if you have any.
Thanks,
Enrico
"On ne voit bien qu'avec le coeur. L'essentiel est invisible pour les yeux."
Saint-Exupéry
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