Comments on: Fun with Stock Collars http://www.livelearninvest.com/fun-with-stock-collars/ Living life to its fullest by generating passive income through investments Thu, 02 Feb 2012 03:11:13 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Kidgas http://www.livelearninvest.com/fun-with-stock-collars/comment-page-1/#comment-57395 Kidgas Fri, 28 Nov 2008 00:40:05 +0000 http://www.livelearninvest.com/blog/?p=1079#comment-57395 I am wondering how the paper trade is going. Have you done any trading with actual money? I would wonder what you could have done had you bought back the Jan 10 580 calls once they lost 50% of their value and sold lower strike calls on the way down. I am wondering how the paper trade is going. Have you done any trading with actual money? I would wonder what you could have done had you bought back the Jan 10 580 calls once they lost 50% of their value and sold lower strike calls on the way down.

]]> By: Rob http://www.livelearninvest.com/fun-with-stock-collars/comment-page-1/#comment-45950 Rob Tue, 05 Aug 2008 07:02:46 +0000 http://www.livelearninvest.com/blog/?p=1079#comment-45950 A couple thoughts on your trade: To the upside, before commissions, you will make ~$3,000 on your investment of $53,666 (or about 5.5% over 2 years - or about half the APY of a decent CD.) With the stock and the sold CALL, you've created a covered call. What some might do is only buy the PUT when the stock has risen to near 580 to protect the stock's gain. As the stock falls, most of the "loss" is offset by selling the PUT and realizing it's gain. You can milk this numerous times until 2010 as the market fluctuates. It does carry risk though as the bottom could fall out before you re-buy your PUT. Between real estate, poker, options, TOS, etc ... we've got at least a few things in common. G/L with everything ... A couple thoughts on your trade: To the upside, before commissions, you will make ~$3,000 on your investment of $53,666 (or about 5.5% over 2 years – or about half the APY of a decent CD.) With the stock and the sold CALL, you’ve created a covered call. What some might do is only buy the PUT when the stock has risen to near 580 to protect the stock’s gain. As the stock falls, most of the “loss” is offset by selling the PUT and realizing it’s gain. You can milk this numerous times until 2010 as the market fluctuates. It does carry risk though as the bottom could fall out before you re-buy your PUT.

Between real estate, poker, options, TOS, etc … we’ve got at least a few things in common. G/L with everything …

]]> By: Kenric http://www.livelearninvest.com/fun-with-stock-collars/comment-page-1/#comment-45223 Kenric Fri, 01 Aug 2008 08:38:16 +0000 http://www.livelearninvest.com/blog/?p=1079#comment-45223 My paper trading account does include commissions. The trade is still profitable. I just didn't want to confuse the math with commissions in the post. My paper trading account does include commissions. The trade is still profitable. I just didn’t want to confuse the math with commissions in the post.

]]> By: Shaun http://www.livelearninvest.com/fun-with-stock-collars/comment-page-1/#comment-45070 Shaun Wed, 30 Jul 2008 20:59:57 +0000 http://www.livelearninvest.com/blog/?p=1079#comment-45070 Before doing this for real, run the analysis again including commissions. They tend to eat into your profits quite a bit with options. Before doing this for real, run the analysis again including commissions. They tend to eat into your profits quite a bit with options.

]]> By: moom http://www.livelearninvest.com/fun-with-stock-collars/comment-page-1/#comment-45020 moom Wed, 30 Jul 2008 08:28:48 +0000 http://www.livelearninvest.com/blog/?p=1079#comment-45020 Well, options pricing theory basically comes down to the point that if you use options to eliminate the risk you receive the risk free return. And that is pretty much what you are showing here. Well, options pricing theory basically comes down to the point that if you use options to eliminate the risk you receive the risk free return. And that is pretty much what you are showing here.

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