Comments on: WSJ blogger’s predictions for ‘09 http://catstockblog.com/2008/12/wsj-bloggers-predictions-for-09/ Caterpillar Inc. (NYSE:CAT) stock news and links Sat, 19 May 2012 11:31:09 +0000 http://wordpress.org/?v=2.6.5 By: Alexander Shlepakov http://catstockblog.com/2008/12/wsj-bloggers-predictions-for-09/#comment-121 Alexander Shlepakov Fri, 16 Jan 2009 15:38:57 +0000 http://catstockblog.com/?p=376#comment-121 The Market is still headed downwards. Purchasing puts without owning shares of the underlying stock is a purely directional strategy used for bearish speculation. The primary motivation of this investor is to realize financial reward from a decrease in price of the underlying security. This investor is generally more interested in the dollar amount of his initial investment and the leveraged financial reward that long puts can offer than in the number of contracts purchased. Experience and precision are key in selecting the right option (expiration and/or strike price) for the most profitable result. In general, the more out-of-the-money the put purchased is the more bearish the strategy, as bigger decreases in the underlying stock price are required for the option to reach the break-even point. Alexander Shlepakov The Market is still headed downwards. Purchasing puts without owning shares of the underlying stock is a purely directional strategy used for bearish speculation. The primary motivation of this investor is to realize financial reward from a decrease in price of the underlying security. This investor is generally more interested in the dollar amount of his initial investment and the leveraged financial reward that long puts can offer than in the number of contracts purchased.

Experience and precision are key in selecting the right option (expiration and/or strike price) for the most profitable result. In general, the more out-of-the-money the put purchased is the more bearish the strategy, as bigger decreases in the underlying stock price are required for the option to reach the break-even point. Alexander Shlepakov

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