sean,
if i buy a stock at 60 and i sell a put with strike of 58 and stock drops to 40 at expiration how does the cash i had to secure the short put do the same job as a long put. i now paid 58 dollars for a stock worth 40, not a very good thing and the cash did nothing for me except being lost. however if i paid 4 dollars for a 60 long put i would have protection. can you explain how the cash does the same as the long put? drjoe
--- In ConservativeOptionS
>
> Ashok
> CSP = Cash secured Puts.
> Bit like what u r doing, since u have cash to buy the stock if put is ITM. IMHO, cash is doing the job of LP.
> I like the way you are trading the system, ashok.
> sean
>
> --- In ConservativeOptionS
> >
> > I have been selling OTM SP's of ETF's or blue chips insurance)that I consider are at historic bargain price, without buying LP ITM insurance. If they get assigned then I don't mine owning them at that price; becasue I will then sell CC and continue to produce income. So far, this seems to work well in the upward market. drjoes starategy of buying ITM LP may give an added protection if the market suddenly tanks. Sean, what is CSP?
>
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