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OK, real world example

By: Java



I just sold 10 puts.  Alibaba.  $160 for January of 2020.  For $10.35 

 

Means I am obligated to buy 1,000 shares if someone pins me to it before then at $160.  I basically was paid about $10,200

 

BABA is now at $169.

 

If BABA falls below $160 someone could make me buy it.  Because of what I was paid, I will break even or make money if BABA stays above $149.65

 

If you're not following that let me know.  We are going to follow this thing for the next 6 months.  I am putthing this here as a documented posting so I can refer back to it.  If it goes south and I have to buy it out and throw it forward we will be able to see how it all works out.  Almost hoping it does have some gyrations so we can use the various different alternative routes available to us. 

 

If this plays out we pocketed $10,200.  Considering out potential purchase is $160,000 I think that's pretty good. 

 

 

 

 

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