Long Put (8 Aug 11)

Long Put (ETFs)

A Put option gives the buyer the right to sell stock at a specific price (strike price) on or before a specific date in the future (expiration date).  When you purchase a Put option you are basically betting that the price of the underlying stock will fall.  The Put buyer loses money if the underlying stock does not fall before the expiration date.

GDX  $55.42

Buy to Open (1) Jan 12 55 P @ $5.45 

Net Debit: $5.45 ($545.00)

Profit Target (50%): $8.50 ($850.00)

Stop-Loss Point (50%): $2.80 ($280.00) 

XRT  $48.69

Buy to Open (1) Jan 12 50 P @ $4.70 

Net Debit: $4.70 ($470.00)

Profit Target (50%): $7.05 ($705.00)

Stop-Loss Point (50%): $2.35 ($235.00) 

EFA  $53.75

Buy to Open (1) Jan 12 55 P @ $5.30 

Net Debit: $5.30 ($530.00)

Profit Target (50%): $10.60 ($1,060.00)

Stop-Loss Point (50%): $2.65 ($265.00) 

QQQ  $53.83

Buy to Open (1) Jan 12 54 P @ $4.31 

Net Debit: $4.31 ($431.00)

Profit Target (50%): $6.50 ($650.00)

Stop-Loss Point (50%): $2.15 ($215.00)

USO  $33.95

Buy to Open (1) Jan 12 34 P @ $3.40 

Net Debit: $3.40 ($340.00)

Profit Target (50%): $5.10 ($510.00)

Stop-Loss Point (50%): $1.70 ($170.00)

REMEMBER: “When there is a small movement in the stock, there is a magnified movement in the option”.  The “Long Put” strategy can be easily transformed into a “Bear Put Spread”, “Calendar Put Spread”, or “Diagonal Put Spread”.   

All positions displayed are for educational purposes only and are not intended to be recommendations.