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2 replies on “Profits on Protective Puts”
Do you have heuristics about optimal deltas (or other considerations) for placing protective puts? Do you optimize for profit or simply insurance? Thanks!
Hey Laura, I find it to be pretty situational. But I usually go somewhat OTM, so maybe a 37 – 45 delta. And I think of it as insurance, but will “cash in” on it by taking a profit on the puts, as opposed to letting it go to expiration and letting the put get exercised.