In our 'Ides of March' Expiration Q&A Session we answered your options investing questions live! Our attendees asked questions ranging from: Proper Married Put structure and stock criteria for the strategy, comparing the limited risk structure to a leveraged ITM Strangle, Pros and Cons of an ITM Bull Put spread, a look at PowerOptions Signature tools to identify Parity Trades and the best Long Options, managing a long call that has gone against you and more!
Here is a full breakdown of the content in this archived webinar:
1. John S: I am thinking of opening a Married Put / RadioActive Trade on MTCH...just hoping to get a 2nd pair of eyes. (0:00 to 23:20)
- We break down our approach to selecting a put option for the proper coverage on a stock, what stock criteria we would look for in the RadioActive Strategy and adjusting the Search criteria on PowerOptions.
2. Sam: Why not use an ITM Strangle instead of the Married Put? (23:25 to 38:58)
- We take a look at the comparison of substituting an ITM Long Call for the stock in the Married Put, and why we don't consider this a reasonable alternative to the RadioActive Structure.
3. Sam: Can we take a look at an ITM Bull Put spread? (39:11 to 47:05)
- Sam presents and interesting high reward, low risk Bull Put spread - and we break down the risks of this approach and alternatives with the same structure.
4. Luis: Can you use the Signature Tools on PowerOptions for better parity? (47:15 to 51:35)
- Yes! We look at our Spread Chain tool to see the Parity Views of Credit to Debit spread, and walk through using the Long Option Finder (which Luis has had great success with) to find the best long call or long put to buy.
5. John S: I have heard straddles & strangles reflect what the market maker thinks the price range will be during the time to expiration... (51:49 to 54:00)
- In a sense, yes. The cost of the straddle or strangle reflects the Implied Volatility of both options, but it does not mean that higher IV straddles or strangles are more winners than lower IV spreads.
6. Kaushik: Can we review a long call on IQ that is currently down? What repairs or defense could I consider? (54:30 to 59:00)
- We take a look at this position, discuss some ideas for defense, management or exit, and reference our full presentation on Managing a Long Call position and Fixing a Broken Stock.
7. Luis: Why not use a Poor Man's Covered Call to repair the IQ position? (59:00 to 1:07:15)
- It is a possibility (and discussed in the full webinars). We look at why this may or may not be a good approach...and the concerns again of using the term 'Poor Man's Covered Call'.
8. Fernando: If I am short stock, what can you do to hedge / protect the position? (1:07:15 to 1:12:00)
- We take a look at building a short collar or married call against the short stock position, and alternatives to using a Married Call when opening a new short position.
9. 1:12:05 to end: Wrap Up.
(We did have another discussion with John F. after the recording was stopped on managing a Bear Put Debit Spread that is going against him. This was not included, but you will see more information on that this week).
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