Wednesday, December 30, 2009

If I buy a stock with decent volume numbers and buy put protection on it, can I ever lose?

How often should I renew my put protection?If I buy a stock with decent volume numbers and buy put protection on it, can I ever lose?
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Yes. You will lose money unless the price of the stock rises to a price greater than the sum of what you paid per share for the stock plus what you paid per share for the put option.





%26lt;%26lt;%26lt;How often should I renew my put protection?%26gt;%26gt;%26gt;





As long as you want to hold the stock protected by puts.If I buy a stock with decent volume numbers and buy put protection on it, can I ever lose?
yes, what if the stock doesnt move up or down? then you lose the money you paid for the put.

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