If you think companies like Tesla, Meta, Apple, Amazon, Microsoft, Nvidia, Google, i.e., the "Magnificent Seven", which are all among the 10 top holdings in the Nasdaq 100, are going to lose value, that would be a good idea. The problem is, AI has caught the imagination of investors and as it ramps up it's hard to see these co.s not benefitting.RainbowsandUnicorns wrote: ↑Fri Mar 01, 2024 6:35 am Talk to me in October and early November.
Looking at the chart, is it supposed to be telling me I would be foolish not to buy some long term (Sept/Jan/March2025) puts?
But, they can't go up forever and seem overpriced, so they're due for a big exhale, we just don't know when.
The other problem, (as you know), would be that long puts suffer from time decay so you'd have a deteriorating asset. Which is one reason why, generally speaking, I prefer to be an option seller, where time works in my favor. Selling puts you're not as likely to get "rich", but also less likely to suffer a large loss. (I only sell cash-secured puts, never naked puts.) With a longer time horizon you can try to hit more home runs, but my risk tolerance is necessarily low considering I'm no longer working, i.e., in the "accumulation phase" of life. But, nonetheless, I actively trade ~ 40% of my total worth, using verticals, iron condors, cash-secured puts, and covered calls, which some people would not necessarily characterize as "risk averse".
