Question:
What is the advantage of buying stock with an in the money married put over just buying the call of the same strike price to start the trade?
Answer:
The most powerful benefit is that this arrangement doesn’t allow you to become overextended. It FORCES a position size that doesn’t hurt too badly if it goes against, whereas someone wishing to invest in the same issue with the same sentiment might be tempted to over-trade their available capital.
Also, there are adjustments that can be done with the put that cannot be done at a profit with a long call.
Finally, there is the fact that many accounts cannot be traded with pure options plays, or that people may own stock as a part of their compensation plan at work, and these strategies directly benefit those situations.
About admin
I'm Kurt Frankenberg, and I have discovered how to truly put the odds on the side on the individual investor. It uses a principle that has been in front of our eyes all along, but is rarely used or understood. Other systems advocate treating the stock market like a business. My system really does.
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