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Dow put options on spy

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dow put options on spy

Founded in by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. The Dow Jones Industrials DJINDICES: With every new Dow milestone that goes into the spy, more investors start getting nervous about how to protect themselves against what many see as an inevitable downturn. Obviously, one solution is simply to sell off your stocks. Yet doing so means giving up every penny of potential future gains, as well as incurring capital-gains tax liability. Instead, one spy strategy to consider involves buying put options. Although many investors see options as being too risky, buying puts as part of your broader portfolio strategy can actually reduce risk compared to simply owning stock put. Crash protection -- spy a price Put options give you the right to sell stock at a particular price within a certain period of time. If the share price falls below the option's specified strike price, then it'll be smart for you to exercise your option put get put above-market price for your shares. But if the share price stays above the put option strike price, then you won't exercise and dow simply allow the option to expire options. Investors interested specifically in the Dow have a couple of choices. First, if you invest in the Dow using the SPDR Dow Jones Industrials ETF NYSEMKT: DIA dow, then you can buy put options on ETF shares in share increments. Alternatively, CBOE Holdings NASDAQ: In either case, though, the idea is the same: Those two variables will determine how much you'll have to pay for the put option. Obviously, the longer you want protection, the more you'll have to pay. The put-option trade-off The problem with buying crash protection is that the cost eats away at your total returns. Nevertheless, if stocks go up, stay flat, or even fall less dramatically than where your put options protection put in, then you'll lose what you paid for the option. You can't afford to suffer repeated losses without severely damaging your portfolio performance. Spy, if you have very specific worries about the market and are comfortable taking a stand on spy when a crash or correction might happen, then put options can help you reduce or eliminate losses without having to sell your shares. The fact that you still get to reap rewards if the Dow keeps rising is just icing on the cake. Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter: The Motley Fool has no position in any of dow stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Dan Caplinger dow been a contract writer for the Motley Fool since As spy Fool's Director of Investment Planning, Dan oversees much of dow personal-finance and investment-planning content published daily on Fool. Options a background as an estate-planning attorney and independent financial spy, Dan's options are based on more than 20 years of experience from all angles put the financial world. Skip to main content The Motley Fool Fool. Premium Options Help Fool Spy Contact Us Login. Latest Stock Picks Stocks Premium Services. Stock Advisor Flagship service. Rule Breakers High-growth stocks. Income Investor Dividend stocks. Hidden Gems Small-cap stocks. Inside Dow Undervalued stocks. Learn How to Invest. Credit Cards Best Credit Cards of Best Credit Card Sign-Up Bonuses Best Balance-Transfer Credit Cards Best Travel Credit Cards Best Cash-Back Credit Cards Best No-Annual-Fee Credit Put Best Small Business Credit Cards. Dow Compare Mortgage Rates Get Pre-Approved How Put House Can I Afford? Taxes How to Reduce Options Taxes Deductions Even Pros Overlook Audit-Proof Your Tax Return What Info Should I Dow Helping the World Invest — Better. Options to Invest Learn How options Invest. Personal Options Credit Cards Best Credit Cards of Best Credit Card Sign-Up Bonuses Best Balance-Transfer Credit Cards Best Put Credit Cards Best Cash-Back Credit Cards Best No-Annual-Fee Credit Cards Best Small Business Credit Cards. Aug 11, at 9: SPDR Dow Jones Industrial Average ETF Trust NYSEMKT: dow put options on spy

4 thoughts on “Dow put options on spy”

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