fuzzballl 12:58 pm on Monday, April 30, 2018
Tags: DisasterPuts ( 2 ), LEAPS ( 418 ), LongCalls ( 495 )

TQQQ

#LongCalls #LEAPS #DisasterPuts – Been throwing around this idea for awhile. Taking a shot as an experiment. Instead of buying expensive put protection I’m buying some cheap ones but at twice the size. If this thing implodes I’ll take profits and buy more LEAP calls. If it doesn’t implode I won’t even notice the cost of these in a few weeks of weekly call sales.

Bought to Open TQQQ JAN 18 2019 32.5 Puts @ .80

Using 2019 since there weren’t any cheap ones in 2020. I’ll look at those if they add lower strikes…

jsd501 2:29 pm on Monday, April 30, 2018

It is so far out of the money that I don’t see the benefit. I leave 15 minutes early and the market has a mini decline.
- fuzzballl 3:38 pm on Monday, April 30, 2018
  
  Since they are disaster puts let’s assume a disaster. To me that would be waking up tomorrow to a 50 percent drop and a 50 percent volatility expansion. You mentioned the other day a potential drop to 70 so that’s about 50 percent. Of course the closer we get to expiration the less value the disaster puts will have.
  
  I wouldn’t get as much value out of TQQQ since I only bought a 2 for 1 ratio. Even then if the disaster happens these puts would completely cover my $4500 loss on the long LEAPS and actually make a couple hundred.
- fuzzballl 3:42 pm on Monday, April 30, 2018
  
  BABA is even better since I went 5 to 1 on the ratio and they’re out to 2020. A 50 percent drop (or more if they are going out of business) would cover all of my $2100 loss on the LEAP calls and make another 13 grand. Not likely but pretty cheap insurance compared to buying much more expensive puts. I agree probably not really needed but something to try for fun.