These buys of mine are still in the green: HD, CXW, GLW (bought a big position in 2012), STWD, UMH, GNL, SFL.
Some of these are REITs I bought at the last 52wk and 2 year lows. Rest all is sea of red
Does it also means too many traders selling puts? How does that work. The numbers of buyers and sellers must be same. Correct?
Who are the people selling?
Note 1: Must the number of puts bought and sold be same ?
Huh? Thought I told you how options work? Options are not stocks. Market makers buy and sell from you. Of course they would hedge. When you buy puts, Market makers sell you put i.e. end up being long so they short the stocks to maintain delta neutral - means independent of price movement.
IMO, Selling puts wonât crash market, but selling stocks crash market. Most of the put buyers (except me !) are holding puts for further prices down another 10%.
There is some one selling. In this case not a trader but the market maker.
So, the number of puts bought must be same as number of puts sold (by someone).
Correct. That some1 is the market makers. Recall I told you about delta of options?
Say the delta of put is 0.5 and you bought 2 of them i.e. delta = 1. In order for market makers to be independent of price movement (they make money from bid/ask spread) so they would go delta neutral by selling 100 shares otherwise they end up long 100 shares arising from delta = 1.
So, i am wondering if i did this right. I had some VOO purchased at 272. I just did a sell to open of a call option for VOO for a $250 strike price at a price of $18. So effectively if I am doing my math right:
if the option gets exercised by the purchaser of the option, I will be out $4 and fees (since I had already bought the stock) for each stock. if they donât exercise the option, I still keep my stock and get to bank the $18.
Am i missing anything? at this point, I need to just hope the market keeps tanking since i already sold a call against the stock that I own. And if it doesnât tank, at least I have exited at a loss of $4 + fees per share
NVM: ideal scenario for me is if VOO stays above $250. If VOO drops below $232, then the option will get exercised. if VOO trades between $232 and $250 i end up with some option money, but below what I would have gotten if I sold the stock. need to write the state machine out on paper