By: Tom Gentile
on November 18th, 2021
All types of Insurance out their – Can one get insurance on their stock
People can buy various types of insurance, Life, Car, Home, Boat etc. But did you know one can buy insurance on a stock that they own?
One can definitely ensure their stock, and the good thing it isn’t based on any mortality rates as there is on a human.
LEAPs Puts can be used for just this objective.
When one owns at least 100 shares of stock they can buy to open a Put option (1 contract) and it will act as an insurance policy for that stock.
If one has more than 100 shares they can buy to open a put option for every 100 shares owned if they like.
This ensures the owner of the put option the right to ‘Put’ the stock to the markets, also known as ‘assign the stock’ to the markets at the strike price of the put option. What one has at risk in price decline could be made up for in the put option trade.
You can read up on the Married Put strategy and see how it can protect ones portfolio against large price drops in ones stocks and talk with their financial professionals on if and when it is prudent to do so as it may provide some peace of mind.
In the Unusually High Put Option Volume list I see a bunch of Apple, Inc. (NASDAQ: AAPL) April 14, 2022, Puts. With so many folks bullish on AAPL by virtue of call shorter-term call options on AAPL showing up on two other lists these stood out.
My take is these could be a bunch of LEAPs being purchased by those wanting to protect against a drop in AAPL.