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I am an Options Spread Trader with a bias towards Bull Put Credit Spreads. I am a big believer in acquiring equities...only if I make a mistake by selling the OTM Put option to close to the current price action. My goal is to collect premiums, monitor time-decay and close positions quickly if... More
  • Buy Protection 0 comments
    May 28, 2010 9:07 AM

    Would you own any hard asset and not buy insurance coverage?   How about your car, your home, your apartment, or your life?

    Well the answer would likely be a resounding "no!" and there is good reason.   We protect everything we own with insurance.  Insurance pays us if the worst case scenario occurs.

    Therefore, the next question you must ask yourself:  am I protecting my investments properly with an effort equal or greater than the insurance I buy for everything else in my possession?  If not, then why?

    You can answer that question yourselves but I submit this:   buy puts, buy them within strike prices that protect your equities at some level (say 10%??)....think of the strike you choose as the deductible you allow on your home?  Is that a $2500 deductible on a $150,000 home?   Or do you pay more and choose a $500 deductible.

    The math is easy!   Buy puts or risk a melt down worse than 2008.

    Disclosure: Long TSL, Long AMGN, Long APWR, Long DLTR - - all with June puts purchased.

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