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August 4th, 2025 at 5:26:33 AM permalink

AZDuffman

Member since: Oct 24, 2012
Threads: 137
Posts: 21195

Quote: DoubleGold
Covered put options are like car or homeowner's insurance.

Do you own a car or a home without insurance?

The idea is simple.

Don't liquidate the portfolio.

When the market peaks, buy put options (insurance premium).

After the market tanks, sell the put options previously bought.

If owning insurance:

The maximum gain is infinite less the premium.

The maximum loss is the premium.

If not owning insurance:

The maximum gain is infinite.

The maximum loss is 100%.

No such thing as a covered put. I think you meant to say a collar.

War is peace. Freedom is slavery. Ignorance is strength

August 4th, 2025 at 5:58:06 AM permalink

DoubleGold

Member since: Jan 26, 2023
Threads: 34
Posts: 4245

Quote: AZDuffman
No such thing as a covered put. I think you meant to say a collar.

Covered just means not naked.

If I own the underlying security, I'm covered (conservative).

If I don't own the underlying security I'm naked (speculative).

"A covered option constructed with a call is called a "covered call", while one constructed with a put is a "covered put". "

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Covered option
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A covered option is a financial transaction in which the holder of securities sells (or "writes") a type of financial options contract known as a "call" or a "put" against stock that they own or are shorting. The seller of a covered option receives compensation, or "premium", for this transaction, which can limit losses; however, the act of selling a covered option also limits their profit potential to the upside. One covered option is sold for every hundred shares the seller wishes to cover.

A covered option constructed with a call is called a "covered call", while one constructed with a put is a "covered put". This strategy is generally considered conservative because the seller of a covered option reduces both their risk and their return.
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https://en.wikipedia.org/wiki/Covered_option

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August 4th, 2025 at 6:52:48 AM permalink

AZDuffman

Member since: Oct 24, 2012
Threads: 137
Posts: 21195

Quote: DoubleGold
Covered just means not naked.

If I own the underlying security, I'm covered (conservative).

If I don't own the underlying security I'm naked (speculative).

"A covered option constructed with a call is called a "covered call", while one constructed with a put is a "covered put". "

------------

Covered option
.
.
.
A covered option is a financial transaction in which the holder of securities sells (or "writes") a type of financial options contract known as a "call" or a "put" against stock that they own or are shorting. The seller of a covered option receives compensation, or "premium", for this transaction, which can limit losses; however, the act of selling a covered option also limits their profit potential to the upside. One covered option is sold for every hundred shares the seller wishes to cover.

A covered option constructed with a call is called a "covered call", while one constructed with a put is a "covered put". This strategy is generally considered conservative because the seller of a covered option reduces both their risk and their return.
.
.
.
https://en.wikipedia.org/wiki/Covered_option

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Correct for call because if called you have the security. Put would be “covered “ with cash as you are getting not providing a security if assigned.

War is peace. Freedom is slavery. Ignorance is strength

August 4th, 2025 at 7:12:40 AM permalink
DoubleGold Member since: Jan 26, 2023 Threads: 34 Posts: 4245	Can't own a put without paying cash for it first. So it's not covered by the cash. The cash is already gone. Puts are covered by the underlying security. The underlying security and the put oppose each other. So it's just locking in a gain until something changes.

August 4th, 2025 at 7:26:34 AM permalink

AZDuffman

Member since: Oct 24, 2012
Threads: 137
Posts: 21195

Quote: DoubleGold
Can't own a put without paying cash for it first.

So it's not covered by the cash.

The cash is already gone.

Puts are covered by the underlying security.

The underlying security and the put oppose each other.

So it's just locking in a gain until something changes.

You had better learn more before starting to trade options. Clearly you do not understand puts.

War is peace. Freedom is slavery. Ignorance is strength

August 4th, 2025 at 7:28:02 AM permalink
rxwine Member since: Oct 24, 2012 Threads: 217 Posts: 22943	More bad news for failed Trump. Quote: According to a note released by Goldman Sachs over the weekend, preliminary revision estimates set to be published by the Bureau of Labor Statistics (BLS) in September will reveal a 550,000-950,000 downward revision for the 12-month period through March 2025. "Trumpsplain (def.) explaining absolute nonsense said by TRUMP.

August 4th, 2025 at 7:36:02 AM permalink
DoubleGold Member since: Jan 26, 2023 Threads: 34 Posts: 4245	Quote: AZDuffman You had better learn more before starting to trade options. Clearly you do not understand puts. You are referring to the other side of the put trade. Such as writing a put. I'm referring to owning a put. The writer gets the premium but the owner has to pay the premium.

August 4th, 2025 at 8:14:51 AM permalink

SOOPOO

Member since: Feb 19, 2014
Threads: 25
Posts: 5748

So market rebounds ‘bigly’ today. Gee, I thought the jobs thing was a HUGE negative? Is it the market trusts Trump to win a few more trade deals, eliminate a few more useless and wasteful federal programs, and unshackle some more businesses from the morass of red tape bestowed upon them under the last administration?

Or more realistically….. it’s just a blip in the overall slow general ascent in the stock market since the end of the depression 90 ish years ago?

August 4th, 2025 at 8:43:09 AM permalink

PotPie

Member since: Oct 9, 2022
Threads: 11
Posts: 550

Quote: SOOPOO
Or more realistically….. it’s just a blip in the overall slow general ascent in the stock market since the end of the depression 90 ish years ago?

generally agree - that is very possible, maybe even likely

my thinking was that Trump is doing so many different things so fast that he is creating uncertainty

and investors generally don't like uncertainty or the unknown

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the foolish sayings of a rich man pass for words of wisdom by the fools around him

August 4th, 2025 at 1:20:59 PM permalink

fleaswatter

Member since: Oct 24, 2012
Threads: 5
Posts: 1762

Quote: PotPie

I'm about 95% invested in the stock market

Quote:
I'm expecting to take a big hit - I won't sell, it's not my way - if it happens as I expect I will hope for a rebound that may take years

Wow, this post didn't age well! Less than 24 hours. LOL
Dow +585.06
NASDAQ +403.45

Quote:
Trump firing his Labor Statistics head for her honest report on hiring is going to, I believe, cause the markets to lose faith in economic statistics coming from his Administration. And that I believe will cause a large sell off.

See above.

Quote:
Also, if immigrants continue to rapidly disappear businesses will become less efficient, meaning they will no longer be able to provide goods and services at prices we are used to.

And if they begin hiring U.S. citizens for all of these low level jobs they will have to pay them a lot more.

And that will contribute to a much more inflationary economy

Quote:

I'm hoping I'm wrong but I don't think so.

Quit hoping and stop thinking, you are wrong.

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