24% annualized cash on cash with covered puts, why?

william the wie

Gold Member
Nov 18, 2009
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I did a screen today and not only were puts priced in the stratosphere but no one seems to be buying calls. That sounds like smooth sailing as far as the eye can see.
 
I did a screen today and not only were puts priced in the stratosphere but no one seems to be buying calls. That sounds like smooth sailing as far as the eye can see.

Explain why you think that means smooth sailing. If the purchase of a put option is "high" that would tell me sentiment is bullish, people want a stock put to them at a given price. A contrarian would suggest that when all the sentiment is either bullish or bearish, it's time to get on the other side.
 
Puts are the poor man's way of selling short, no margin debt and no dividend payments to make. High put premiums are highly bearish
 

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