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Intercontinental Exchange, Inc. Message Board

  • mrcmeguy mrcmeguy Feb 3, 2007 10:18 PM Flag

    going to buy protective puts

    anyone else?? nice run up from 100 and i will take 6 bucks and buy the feb 145 protective puts . Think its worth the protection instead of getting stopped out and paying tax. Thoughts??

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    • Why "buy" a put when you can "sell" a call. Then you get paid no matter what and if you think this is the top then you will have downside protection as well from the premium collected. The problem with the puts is that the volatility premium will evaporate once earnings come out and even if it dips you will see a minimal return and probably not enough to even cover commissions. I've always been much happier selling calls. You will get taxed on anything you make on the puts so I think that angle is irrelavant and you shouldn't make trading decisions based on taxes anyway.

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