Options Boot Camp

Basic Training: How to protect your profits. Easiest method: 1st buy a 2-3- month put ATM or slightly OTM put. Purchase an ATM put spread with the short leg at your break-even point. Easiest to do in a single stock or underlying. What to do if you have a broad equity portfolio? Its a little more complicated. Determine the effective beta of your portfolio an how many effective shares of that index you own. Rule of thumb - Expect to spend about 2% of your portfolio for effective 3-6 month protectionHow to reduce the cost of protection. Buy a spread instead of an outright put. Set up a collar. Set up a collar with a kicker. Mail Call: Listener Questions and Comments Question from Big Charlie - Hey guys. What is your take on the OH/Monster merger? What does this mean for the options landscape going forward? Question from Brian Collamer - Hi Mark, If I have a short call in $SPY on the ex-dividend date that is OTM, I will not owe the dividend correct? Thanks, Brian Comment from Justin - Hi Mark, Just heard my qu