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| The October contract may fall to $160 in May or June and your $165 put option may be worth $10 still. It might only be worth $7 in that situation too. It may be worth $15 but highly unlikely unless prices and volatility are really jumping.
Just guessing, at around $157 in the near term (couple weeks), your $165 put will be worth $15. So you'll leave $1500 on the table buying a put instead of selling outright. Next October if the money is at $155 you'll get your premium back but leave $5000 on the table.
A $5000 premium is like $75/head. Not saying this option is a bad idea just trying to put it in perspective. | |
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Put question
