Message Font: Serif | Sans-Serif
No. of Recommendations: 0
Your downside breakeven on the buy-write trade is $81.70 (86.00-4.30). Below $81.70 you lose money.

Your upside breakeven on the buy-write trade is $89.30 (85.00+4.30). Above $89.30 you would have been better off buying the stock without selling any calls against it.
So, if you sell 2 puts at $80 (the closest strike to $81.70) you have covered yourself on the down side. Is this called a straddle?

Also, wouldn't it be better to sell the put then to do a covered call? If you are long the stock protecting the downside is more important. And, if you wanted to sell a "long" option why not sell a leap?

MZ4 - who is finally (he thinks) getting it......I can run a $1M cardiac cath xray machine and fix hearts but can't get options...go figure.
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.