• C++ Programming for Financial Engineering
    Highly recommended by thousands of MFE students. Covers essential C++ topics with applications to financial engineering. Learn more Join!
    Python for Finance with Intro to Data Science
    Gain practical understanding of Python to read, understand, and write professional Python code for your first day on the job. Learn more Join!
    An Intuition-Based Options Primer for FE
    Ideal for entry level positions interviews and graduate studies, specializing in options trading arbitrage and options valuation models. Learn more Join!

Anyone used puts for personal investing activity?

Hi all

Just wondering if anyone here has purchased put options to bet on a declining stock price for their own investing activities?

If so:
- on what stock exchange
- was the outcome positive or negative
- what maturities did you use / were you able to choose from?
- anything else you wish to add?

Basically, I am looking into taking longer term positions against individual stocks. Shorting appears particularly difficult and/or expensive in the ASX, and CFDs, from the tiny bit I have read, seem to be prohibitively expensive and geared towards short term strategies - hence why I am interested in puts as an alternative.

Cheers
 
- cbot / nyse?
- hardly protective puts
- mostly spreads - butterfly, bear
- add in calls to get strip, strap, straddle and strangles
 

diegosanaz

BU MSMF
Shorting with puts might also result expensive as the put looses time value. Also, either you buy an iliquid put expiring in a long time or you will need to constantly roll the position. I would recommend you to look into the expenses of buying a put and compare them to shorting a position to see what is more viable. (I have only shorted index options to hedge positions over a short period).
 
I have no real issue with the time decay, as its my intention to use them as leverage into short positions.. i dont wish to actively trade the options themselves, but its a valid consideration. Shorting, at least in my local market, appears to be quite expensive.
Cheers guys
 
Out of interest alain, did you purchase these puts at the money, or some distance out of the money, and what influenced you decision either way, if you don't mind me asking.
 

alain

Older and Wiser
Out of interest alain, did you purchase these puts at the money, or some distance out of the money, and what influenced you decision either way, if you don't mind me asking.
the were out of the money and my decision was based on the economics of RIM at that time.
 
Ah sorry, I more meant, what influenced your decision on whether to buy at the money or out of? Am currently trying to find a good source of option history data, given that I currently i have no access to paid terminals, to run a strategy similarly based on economics (or fundamentals).
 
I have bought out of the money puts in a run up because the premium has been lowered thanks theta. Besides the fun "lotto play" every now and then that Alain mentioned, I do buy puts when a long term investment I own looks likely to sell off, or had such a huge run up instead of selling I just buy some puts to hedge my investment size accordingly. I will say this plan worked out well in the past where I was both up on my long term investments, and up on the puts. If I feel there's a bottom I can then cash out and use the put profits to add shares.
 
Top