Married Put Critics: Aren’t Long Calls Better & More Profitable?
Thursday, December 10th, 2009Critics Question: On March 21st, Google was at $397. I bought 1000 of the JAN 2010 350 Calls for $73. Today it’s worth over $240,000…The same $73,000 would have bought me 200 shares of Google and the 420 strike put option was a ton of money. But today the put is worthless and would it not just take away alot of profits??
RadioActiveTrading Staff Answer: Although Married Puts and Long Calls seem to have the same risk/reward profile, Long Call positions can be over traded and take on too much risk. Yes, the GOOG position worked out, but we never know the future. Here is a different example of how the Married Put would have been a better trade compared to a Long Call position: (more…)