Aren’t Protective Puts / Married Puts EXPENSIVE?
Wednesday, February 24th, 2010Ah, just reveling in the morning after the FORT - Foundations Of RadioActive Trading Seminar. Here’s a question that came up, and that merits a good answer:
“Aren’t protective puts EXPENSIVE?”
Well… yes and no. I mean, they do cost money. The question should be phrased more like this: “Are protective puts WORTH what they COST?”
Better question, I think. Because guess what - the benefits FAR outweigh the costs. Plus, the put option may actually become a source of income… (more…)