Investors buy a stock with the hope of the security trading higher over time. However, when 'speed bumps' occur, like a recession or depression, those same investors lose significant amounts of capital. If you own a home, car, boat or another favorite and valuable asset you will have insurance on them.
You will protect your hard earned assets from catastrophe. So why not protect your hard earned money and retirement from a stock market catastrophe?
Unfortunately, most investors are unaware that insurance can be purchased for their stocks as well in the form of a 'Married Put' strategy. A married put comprises two components long stock and long put. If an investor owns shares of stock, one long put could be purchased. One long put option contract is equivalent to shares of stock. A long put allows an investor to sell shares at a set price within a specific time frame.
Are you upset when your house does not burn down? Are you upset if your car is never in an accident? No, of course not! So do not be upset if the insurance policy is 'worthless' after twelve months. The long put option was there to protect against a catastrophe. Let's take a look at some examples. The net result is still a very attractive return on investment and the trader still had 'peace of mind', knowing that the married put strategy limited the downside risk.
Some traders feel a long put option in conjunction with stock ownership married put is not a useful tool because they expect their stock to rise, not fall. However, in the next example you can see why married put strategies can save a portfolio from massive account depreciation.
The married put strategy sure would provide benefit! Now let's move on to discuss strategy. There could be tremendous upside potential if the fundamentals have not been impaired but the stock has been unfairly punished by the market. If a trader has conducted due diligence and believes the stock could rise substantially and wants to 'stick a toe in the water', a married put strategy could be a great trade to employ. The married put strategy offers a fantastic way to reducing risk while still enabling traders profit from upward movement.
Furthermore, a stock does not need to be 'beaten down' in order to use a married put strategy. The married put strategy can be initiated anytime a trader believes the stock may be headed higher. The married put strategy offers peace of mind due to a pre-defined risk level that is known before the trade is even entered.
Most importantly, you can learn how to profit through trade adjustments even if the stock moves against expectations! Come join a proven winning team today at www. Married Put Investors buy a stock with the hope of the security trading higher over time.More...