The Striking Price Daily - Barrons.com: "WEDNESDAY, JULY 9, 2008
THE STRIKING PRICE DAILY
Hedging Your Bets With Puts and Calls
By BERNIE SCHAEFFER | MORE ARTICLES BY AUTHOR
Investment pro Bernie Schaeffer shows how individuals can use options to mimic the techniques of long/short funds.
Editor's Note: Steven Sears, the regular writer of Striking Price Daily, is on vacation. Today's guest columnist is Bernie Schaeffer, CEO of Schaeffer's Investment Research, an options-based firm that provides analysis and recommendations for its customers.
'TO EVERYTHING THERE IS A SEASON' is a philosophy that seems particularly suited to the options trader. The flexibility of this trading tool in its simplest form is expressed as the ability to profit on a leveraged basis from big moves to the upside or to the downside in the underlying stock through the mechanism of buying calls or puts.
But the ability to sell option premiums, either in combination with positions in the stock or with long option positions, has exponentially expanded this flexibility to include the ability to profit from minor stock moves or from no movement at all.
Of course, there are always big challenges for those buying options to pl"
Wednesday, July 9, 2008
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