994 
Put option basics (continued) 
strategies, 245-247 
time value premium, 246-247 
Put option buying, 256-270 
as alternative to short sale of stock, 256-258 
purpose, 256 
equivalent positions, 270 
protected short sale, 270 
follow-up action, 262-266 
call option, 264 
listed call, buying, 263 
profits, five tactics for locking in, 262-266 
loss-limiting actions, 267-270 
calendar spread strategy, 269-270 
"rolling-up" strategy, 267-269 
margin account required, 269 
ranking prospective purchases, 261-262 
selection of which put to buy, 258-261 
delta, 260-261 
in-the-money puts, concentrating on, 259 
Put option strategies, 243-410 (see also under particular 
heading) 
basics, 245-255 
buying, 256-270 
call and put strategies, similarities between, 244 
LEAPS, 367-410 
listed put options newer than listed call options, 244 
put, sale of, 292-301 
put buying in conjunction with call purchases, 
281-291 
put buying in conjunction with common stock own-
ership, 271-280 
put spreads, basic, 329-335 
ratio spreads using puts, 358-366 
spreads combining calls and puts, 336-357 
straddle, sale of, 302-320 
summary, 366 
synthetic stock positions created by puts and calls, 
321-328 
Put options, assignment of, 7 
Put spreads, basic, 329-335 
bear spread, 329-332 
advantage over call bear spread, 330-332 
as debit spread, 329 
bull spread, 332-333 
as credit spread, 332 
formulae, 333 
risk limited, 333 
calendar spread, 333-335 
bearish, 334-335 
neutral, 334 
option spreads, three simplest forms of, 329 
Index 
Qualified covered calls, 961-962 
Ratio calendar combination, 364-366 (see also Ratio 
spreads using puts) 
Ratio calendar spread, 222-225 (see also Calendar and 
ratio spreads) 
Ratio call spreads, 210-221 
and calendar spreads, combining, 222-229 (see also 
Calendar and ratio spreads) 
combination of bull spread and naked call write, 212 
definition, 210 
follow-up action, 217-221 
delta, adjusting with, 219-221 
equivalent stock position (ESP), using, 220-221 
profits, taking, 221 
ratio, reducing, 218-218 
philosophies, three differing, 213-217 
altering ratio, 215-216 
as ratio write, 213-214 
"delta spread," 213, 216-217 
for credits, 213, 214-215 
preferred over ratio writes, 211-212 
ratio write, similarity to, 210 
dissimilarity, 210-211 
summary, 221 
Ratio call write equivalent to naked straddle write, 306 
Ratio call writing, 146-171 
call spread strategies, introduction to, 168-171 
credit/debit spread, 170 
diagonal spread, 169 
horizontal spread, 169 
kicker, 169 
"leg" into spread, 171 
long/short side, 170 
splitting quote, 171 
spread, definition, 168 
spread order, 169-171 
vertical spread, 169 
combination of covered call writing and naked call 
writing, 146, 150 
definition, 146 
delta-neutral trading, 167-168 
follow-up action, 158-168 
altering ration of covered write, 160 
closing out write, 166-167 
delta, adjusting with, 160-163 
equivalent stock position (ESP), 162-163, 167 
position delta, 162-163, 167 
rolling up/down as defensive action, 160 
stop orders, using as defensive strategy, 163-166 
"telescoping" action points, 166-167 
investment required, 150-151 
and ratio call spreads, similarity to, 210