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Trading Block: Earnings Highlights for the Week
Odd Block: More puts in Tesla Motors Inc. (TSLA) and "Line in the sand" puts in Yelp Inc (YELP)
Mail Block: Options question of the week
Volatility is all over the place these days. Some say it\'s too cheap, others say it\'s too expensive. Either way they want to trade it. What\'s your weapon of choice when trading the wacky world of volatility?
Listener questions and comments:
Example. Tomorrow I may buy 100 Shares of SPY @ 25 each, likely selling the shares in about 20 days. I am trying to figure a way to get the same (or close to same) movement as if I owned the shares outright while limiting the downside of at least setting a li e in the sand. I am having trouble wrapping my head around the right strategy or if what I want to do is even possible. So in the example above my portfolio had I bought outright and the stock is at 30 in 20 days I\'m at $500 but what do I do to get close to this using Options. On the flip side if SPY was at 20, I am thinking there is a way that I would can protect myself from losing some of that $500.
Another thing I\'m not sure of when doing this should I only be buying enough Contracts that I could afford it were I to exercise the options, i.e. if I have $200 in my account and the underlying is $1/share would I only want to buy 2 calls even though I would ideally have enough money to buy more contracts? Thanks for your feedback.
Around the Block/This Week in the Markets