Option Iceman 11:13 am on Friday, May 12, 2017
Tags: FallingKnife ( 963 )

$GE – surprisingly add this…

$GE – surprisingly add this one to the #FallingKnife list

Bill 11:55 am on Friday, May 12, 2017

Jeff, or anyone, can you please point me to a description of the #FallingKnife method?

I see a number of references to this approach, but I’m not sure of the details behind it and what I should be doing when a candidate is posted.

Thank you from a newbie to OptionsBistro!
- Jeff 12:07 pm on Friday, May 12, 2017
  
  Hi Bill, and welcome… it is a hashtag I believe @optioniceman may have invented, or at least introduced me to, that refers to going long on a stock that is down or dropping fast. The often used expression in trading “don’t try to catch a falling knife” is the basis, in that many of us on Bistro sell puts into weakness and calls into strength. Take advantage of the fear of others.
  
  Others can comment to their exact strategy but mainly it is selling puts, preferably below the 200-day moving average or below the stock’s 52-week low, or where you feel the option will expire worthless.
  - Bill 12:18 pm on Friday, May 12, 2017
    
    Thank you for your fast reply, Jeff, and for the welcome!
    
    I appreciate your description and will paper trade it a bit to see how it behaves.
    
    Bill

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