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I know that put options are "safest" bet when anticipating a stock to decline.

But what of a sector, say energy, to decline over a long period of time (> 1 year). Are there additional options available?

Look for a bear ETF for that specific sector?

Note this will be "fun" money - not 401k or IRA!

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Many optionable stocks offer LEAPs which sometimes go out as far as two years. You can find a list of them at the CBOE.com or Google "Symbol Directory LEAP CBOE". I'd be hesitant to buy a furthest expiration because if your timing is off, you're paying top dollar.

There are a number of inverse energy ETFs. You can find a list of them at ETF.DB.com

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The XLE options trade for Jan 2020, but id you look at the premiums, it might be tough. The $70 strike put was last traded at $4.40, you would need a drop to $65 just to break even. Tough to make money that way.

  • If I did the math right that's about a 12.5% drop. Not unreasonable if there's a full-market crash (or even a heavy correction) but yeah, I certainly wouldn't put that kind of money on it. – Kevin Aug 30 '18 at 21:02
  • To break even, far more to make a decent return. On call spreads I look to make 5X for a 30% move over 12-18 months. – JoeTaxpayer Aug 30 '18 at 21:19
  • @JoeTaxpayer - You were discussing a long put and now it's making 5X on a call spread from a 30% move? 5X on a bear call spread's credit? I don't follow. – Bob Baerker Aug 31 '18 at 3:22
  • I offered that for sake of comparison. I had no personal experience buying puts or put spreads. Sorry if my comment confused the issue. – JoeTaxpayer Aug 31 '18 at 3:32

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