Comments on: How to Profit in a Down Stock Market http://investingincanada.info/2009/10/how-to-profit-in-down-stock-market.html Canadian Stock Talk Thu, 18 Feb 2010 04:21:33 +0000 http://wordpress.org/?v=2.9.1 hourly 1 By: Financial Samurai http://investingincanada.info/2009/10/how-to-profit-in-down-stock-market.html/comment-page-1#comment-25 Financial Samurai Mon, 05 Oct 2009 04:05:44 +0000 http://investingincanada.info/2009/10/how-to-profit-in-a-down-stock-market.html#comment-25 Just short everything in October!<br /><br />Financial Samurai Just short everything in October!

Financial Samurai

]]> By: Smac20 http://investingincanada.info/2009/10/how-to-profit-in-down-stock-market.html/comment-page-1#comment-24 Smac20 Sun, 04 Oct 2009 16:19:51 +0000 http://investingincanada.info/2009/10/how-to-profit-in-a-down-stock-market.html#comment-24 Yes, I buy options and sell options from time to time. Buying options is a relatively low risk strategy when you think about it from an exposure stance. For example buying 1 contract of the SPY DEC $90 Puts cost me $1.44 per share. Options trade in lots of 100 so 1 contract represents 100 shares. That is a total cost of $144 for exposure to 100 shares. The most I could lose per contract is $144, while the upside is huge with a large move in the stock. The payoff is pretty much the same as shorting SPY, but that would require risking over $10,300 (100 shares x $103 share price).<br />Basically, as long as you think the stock market will make a move in one direction or the other than options are a great way to capitalize. If you think the stock market will just move sideways then selling options a good strategy, but that is another discussion.<br />Think of it this way, if you think the market will increase by calls; if you think the market will decrease buy puts. Yes, I buy options and sell options from time to time. Buying options is a relatively low risk strategy when you think about it from an exposure stance. For example buying 1 contract of the SPY DEC $90 Puts cost me $1.44 per share. Options trade in lots of 100 so 1 contract represents 100 shares. That is a total cost of $144 for exposure to 100 shares. The most I could lose per contract is $144, while the upside is huge with a large move in the stock. The payoff is pretty much the same as shorting SPY, but that would require risking over $10,300 (100 shares x $103 share price).
Basically, as long as you think the stock market will make a move in one direction or the other than options are a great way to capitalize. If you think the stock market will just move sideways then selling options a good strategy, but that is another discussion.
Think of it this way, if you think the market will increase by calls; if you think the market will decrease buy puts.

]]> By: The Rat http://investingincanada.info/2009/10/how-to-profit-in-down-stock-market.html/comment-page-1#comment-23 The Rat Sun, 04 Oct 2009 02:47:16 +0000 http://investingincanada.info/2009/10/how-to-profit-in-a-down-stock-market.html#comment-23 Interesting. I have absolutely zero experience in dealing with puts or calls...sounds risky...do you feel comfortable with this investment vehicle and buy puts quite often? Interesting. I have absolutely zero experience in dealing with puts or calls…sounds risky…do you feel comfortable with this investment vehicle and buy puts quite often?

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