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Intuitive Surgical, Inc. Message Board

  • bmpthegreat bmpthegreat Mar 17, 2013 12:43 PM Flag


    After losing millions in gains in CME. Google apple and during 2000 Internet bubble I learned the hard way the only way to lock in profits is to buy stock and at he same time buy a married put at a strike price where the stock is. For example Monday buy 100 shares ISRG at 460 with the April 460 puts one contract. No downside risk but all the upside. The cost is worth it. Peace of mind.

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    • bmpthegreat - Nice thought, but your strategy only works for a short term trader who thinks their trade will win big in the period of time the option is open. For example, a $460 put expiring in 5 weeks costs $24.40, so you will lose money unless ISRG hits $484 by April 19. If you buy a July put, you will lose money unless ISRG hits $500, and if you buy a January put, you will lose money unless ISRG hits $513. And if you continue to hold the stock, you have to buy another put, further increasing your investment basis and reducing your gains.

      Of course, your strategy does limit your loss DURING THE OPTION PERIOD ONLY to the cost of the put, but that cost is currently 10% of the stock price for a 6-month put. There are times this strategy is good, but - contrary to your claim - you will actually lose money with this strategy more often than you will make money. Its real effect is that BOTH losses AND gains will be reduced, so it may make sense for investors more scared of losses than excited by gains.

540.70-2.79(-0.51%)Apr 17 4:00 PMEDT