I’m wondering if it would be advisable to buy long dated put options on each as opposed to shares. Normally I don’t buy less than 100 shares of a stock, so buying 1 call option on each would in effect be similar. Thoughts?
That's basically what we're doing with our top names options trades now (buying calls on them), except we add extra legs to finance the call/reduce cost/lower break evens. So our default now is calls financed by a put spread; if the calls still look too expensive, we turn the call into a call spread, capped at the options market's maximum expected move; and in rare cases, if we have strong conviction in the name and are willing to own the stock, then we do risk reversals, where we finance long calls by selling puts instead of using put spreads.
I’m wondering if it would be advisable to buy long dated put options on each as opposed to shares. Normally I don’t buy less than 100 shares of a stock, so buying 1 call option on each would in effect be similar. Thoughts?
That's basically what we're doing with our top names options trades now (buying calls on them), except we add extra legs to finance the call/reduce cost/lower break evens. So our default now is calls financed by a put spread; if the calls still look too expensive, we turn the call into a call spread, capped at the options market's maximum expected move; and in rare cases, if we have strong conviction in the name and are willing to own the stock, then we do risk reversals, where we finance long calls by selling puts instead of using put spreads.
Thank you.