Looking to buy PUT options on ASICMiner

[Vycid]

I've never bought or emitted options so far, but the offer is interesting and I'm considering it.
btct offers 84d (i.e. 12w) options.

However I've made some calculations, and locking 2.3 BTC for a 0.2 premium equals to a weekly gain of 0.01666667, which I think will be lower than the dividend that AM will pay during this period (assuming 0.0290 weekly dividends, that would be 0.01957273 adjusted to what I could buy now with 2.3 BTC), so I could as well buy some AM-PT shares with those coins and have a higher return.

Would you accept either:
 • 84d, 2.3 strike, 0.28 premium
 • 56d, 2.3 strike, 0.16 premium
?

Sorry, no. 0.2 is already a significant premium increase from where I was selling before (0.14). There are a lot of people who are VERY bullish on ASICMiner and don't seem to mind at all promising to buy cheap shares from me.

84 days @ 0.20 is acceptable though (since there is no way to write options for exactly 90 days on BTCT)

What I WILL consider is buying unsecured puts, but you must be a trusted community member and willing to sell at a discount.

[1715033727]

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[1715033727]

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[1715033727]

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[suryc]

How do I write puts on BTCT?
I don't see a way to do it. Can someone provide a little guidance?

[enquirer]

I will immediately purchase ASICMiner puts expiring September 1st, with a strike of 1.8BTC, and a premium of 0.14BTC.

You can use betsofbitco.in site for that (not affiliated).

[Lohoris]

Sorry, no. 0.2 is already a significant premium increase from where I was selling before (0.14). There are a lot of people who are VERY bullish on ASICMiner and don't seem to mind at all promising to buy cheap shares from me.

No problem!
However, please take no offence, but I don't understand why I should invest in selling puts when just buying more shares at current price will earn me more dividends...
Am I missing something?

Ok there is a little bit of diversification, but not so much, since after all the security is the same one...

[Lohoris]

How do I write puts on BTCT?
I don't see a way to do it. Can someone provide a little guidance?

You click on the security, you go into the "options" tab, and at the bottom there is a collapsed table "Write Options — Please make sure you know what you're doing before writing options...".

If there isn't it might have to do with, I don't know, 2FA maybe?

[Vycid]

Sorry, no. 0.2 is already a significant premium increase from where I was selling before (0.14). There are a lot of people who are VERY bullish on ASICMiner and don't seem to mind at all promising to buy cheap shares from me.

No problem!
However, please take no offence, but I don't understand why I should invest in selling puts when just buying more shares at current price will earn me more dividends...
Am I missing something?

Ok there is a little bit of diversification, but not so much, since after all the security is the same one...

Puts are for people who have bought all they want at current prices but would buy more if the price comes down, and are more than happy to get paid in exchange for promising to do so.

[sebastienurbain]

Sorry, no. 0.2 is already a significant premium increase from where I was selling before (0.14). There are a lot of people who are VERY bullish on ASICMiner and don't seem to mind at all promising to buy cheap shares from me.

No problem!
However, please take no offence, but I don't understand why I should invest in selling puts when just buying more shares at current price will earn me more dividends...
Am I missing something?

Ok there is a little bit of diversification, but not so much, since after all the security is the same one...

Puts are for people who have bought all they want at current prices but would buy more if the price comes down, and are more than happy to get paid in exchange for promising to do so.

I don't get it. Why not just wait until the price goes down and then buy? Wouldn't this be the same?

[Lohoris]

Puts are for people who have bought all they want at current prices but would buy more if the price comes down, and are more than happy to get paid in exchange for promising to do so.

I would like to buy down, but if I have to keep the strike money locked, I would better invest it now instead...

[Vycid]

Sorry, no. 0.2 is already a significant premium increase from where I was selling before (0.14). There are a lot of people who are VERY bullish on ASICMiner and don't seem to mind at all promising to buy cheap shares from me.

No problem!
However, please take no offence, but I don't understand why I should invest in selling puts when just buying more shares at current price will earn me more dividends...
Am I missing something?

Ok there is a little bit of diversification, but not so much, since after all the security is the same one...

Puts are for people who have bought all they want at current prices but would buy more if the price comes down, and are more than happy to get paid in exchange for promising to do so.

I don't get it. Why not just wait until the price goes down and then buy? Wouldn't this be the same?

No. I pay you for that promise (0.2 BTC).

In other news, this train has left the station. Price is at 3.9 so I'm now asking for a minimum strike of 2.7.

[Vycid]

Puts are for people who have bought all they want at current prices but would buy more if the price comes down, and are more than happy to get paid in exchange for promising to do so.

I would like to buy down, but if I have to keep the strike money locked, I would better invest it now instead...

Considering I'm offering significantly better than the interest rate, you could always borrow money to escrow.

Or if you're a trusted community member we can work something out.

[Vycid]

Update:

(I am BUYING put options: you write them!)

Strike: 3.3 BTC
Expiration: 90 days
Premium: 0.3 BTC

I will honor this is up to a 4.7 BTC/share price level unless I state otherwise. BTCT only.

Vycid

[runeks]

I've never bought or emitted options so far, but the offer is interesting and I'm considering it.
btct offers 84d (i.e. 12w) options.

However I've made some calculations, and locking 2.3 BTC for a 0.2 premium equals to a weekly gain of 0.01666667, which I think will be lower than the dividend that AM will pay during this period (assuming 0.0290 weekly dividends, that would be 0.01957273 adjusted to what I could buy now with 2.3 BTC), so I could as well buy some AM-PT shares with those coins and have a higher return.

Would you accept either:
 • 84d, 2.3 strike, 0.28 premium
 • 56d, 2.3 strike, 0.16 premium
?

This calculation assumes that the share price doesn't fall at all after you've purchased. If you make x in dividends from holding ASICMINER shares for 12 weeks, then you only earn this full amount if the share price doesn't fall. Otherwise the capital loss (buying_price - selling_price) would eat at your profit.

If you think the share price won't fall in the following 12 weeks, you can make the same amount of money right now, instead of over a period of 12 weeks, by offering 12-week put options with a strike price of the current ASICMINER price and a premium of expected_average_dividend*12.

So if you think 0.04 BTC/week is a high average dividend (I think it is), then you should be willing to sell 12-week put options for 0.48 BTC per contract with a strike price of 4.24 (current ASICMINER-PT highest bid).

If you do this you could buy 1 extra ASICMINER share, and increase your profit further, if the share price doesn't go down.

So in essence you'd be getting an instant, locked-in profit in exchange for a lack of profit in case the share price increases.