I've had so much fun listening to critics say that a married put trade is IDENTICAL to owning a long call... that I just had to make a 5 minute video taking their pants down.
It's actually a very GOOD thing that so many critics are saying what they do about RadioActive Trading and The Blueprint because it's generating more traffic and hence, SALES of my book!
But I should encourage everyone to think critically, and examine the arguments carefully. Anyone that argues that a married put is "identical" to a long call understands neither English nor mathematics. Check out the vid if you've been holding this belief!
This is the first of three answers to the critics' claims. It's not the most important topic, but the one that seems to be bandied about the most... and so very easily rebuffed.
Enjoy!
Thanks Golden Bear... are you a RadioActive Trader? That describes the selling calls side of RT pretty well. Of course, now we are using ten Income Methods and call-selling is only one "option".
Thanks for the post!
K
freedomschool 2 years ago
Look if you want protection of your capital, need to look at the married put as the best option or not get in at all, unless your a risk taker..own the stock, insure with the put and then write call options. If you get called away, sell the balance of the put options,,,the farther out the better the remaining value...wish i had when the housing bubble popped
GoldenBear36 2 years ago 2
No, they're saying that a long call is "more efficient" than a married put because it requires less capital.
I'll go along with that... as you'll see in the next video, "What about the Martingale Effect" the long call in a "requires less capital" scenario is MUCH more efficient at losing you money. ;-)
freedomschool 2 years ago
I had thought that the critics were commenting that the "risk graphs" for the long call were the same(identical) as the married put as opposed to them actually being identical. For example, one owns stock and an ITM put and the other is a long call.
drjsiegel 2 years ago 2