Comments on: The Put-Sell Trade: How to Buy Gold and Silver for a Discount http://www.investmentu.com/2009/November/the-put-sell-trade.html Investment Advice and Investment Research with a Contrarian Point of View Thu, 24 May 2012 17:20:29 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Investment U http://www.investmentu.com/2009/November/the-put-sell-trade.html#comment-29148 Investment U Tue, 10 Nov 2009 14:48:39 +0000 http://www.investmentu.com/?p=12030#comment-29148 Dave, Yes, both strategies are valid and pretty much the same thing. The put sell takes into account the ramifications of the dividend, but you cannot do it in all accounts especially retirement accounts. However, it is your broker that puts on the restrictions and you can call Gunn Allen Financial at 800-329-1984 to find out what their policy is. They are a Pillar One partner and offer extremely low commissions for our readers. As for why to do a put sell in the first place versus a covered call, here is the rationale: A put sell is meant to be a way of tying up less of your cash than owning the shares via a covered call strategy. Since margin requirements usually only require that you have 30% to 40% of the strike price as collateral when you do a put sell, the other monies can be deployed elsewhere and if you are "put" then you have to come up with the difference. You brokerage account should not require you to have cash to support the transaction, just enough collateral in the form of EITHER cash or securities. Investment U Dave,

Yes, both strategies are valid and pretty much the same thing. The put sell takes into account the ramifications of the dividend, but you cannot do it in all accounts especially retirement accounts. However, it is your broker that puts on the restrictions and you can call Gunn Allen Financial at 800-329-1984 to find out what their policy is. They are a Pillar One partner and offer extremely low commissions for our readers.

As for why to do a put sell in the first place versus a covered call, here is the rationale: A put sell is meant to be a way of tying up less of your cash than owning the shares via a covered call strategy. Since margin requirements usually only require that you have 30% to 40% of the strike price as collateral when you do a put sell, the other monies can be deployed elsewhere and if you are “put” then you have to come up with the difference.

You brokerage account should not require you to have cash to support the transaction, just enough collateral in the form of EITHER cash or securities.

Investment U

]]> By: Dave R. http://www.investmentu.com/2009/November/the-put-sell-trade.html#comment-29123 Dave R. Tue, 10 Nov 2009 06:31:57 +0000 http://www.investmentu.com/?p=12030#comment-29123 My brokerage account rules require me to have cash (or in a money market fund which pays negligible interest in current market conditions)in my account in order to sell a put, which means I cannot do anything else with that money until the term of the put contract expires. If the stock is one that pays a dividend, why not buy the stock and sell a covered call instead of selling a put since you might collect dividends in addition to premiums on the put? My brokerage account rules require me to have cash (or in a money market fund which pays negligible interest in current market conditions)in my account in order to sell a put, which means I cannot do anything else with that money until the term of the put contract expires. If the stock is one that pays a dividend, why not buy the stock and sell a covered call instead of selling a put since you might collect dividends in addition to premiums on the put?

]]> By: chuck jaeger http://www.investmentu.com/2009/November/the-put-sell-trade.html#comment-29107 chuck jaeger Mon, 09 Nov 2009 22:44:33 +0000 http://www.investmentu.com/?p=12030#comment-29107 You overlooked a 4th option on the GLD option trade. After closing the puts @ 10 Cents each, you could roll up the trade to a higher strike price with a new expiration date and again sell the GLD puts and collect the option premium. You overlooked a 4th option on the GLD option trade. After closing the puts @ 10 Cents each, you could roll up the trade to a higher strike price with a new expiration date and again sell the GLD puts and collect the option premium.

]]> By: chuck http://www.investmentu.com/2009/November/the-put-sell-trade.html#comment-29100 chuck Mon, 09 Nov 2009 21:57:20 +0000 http://www.investmentu.com/?p=12030#comment-29100 very interesting very interesting

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