In recent days, the US stock market has fallen sharply, and the famous investor Duan Yongping couldn't help but take action!
From the 5 trading orders shared by Duan Yongping, it can be seen that he mainly increased his position by Short Selling Puts, involving US Stocks. $Apple (AAPL.US)$ 、$NVIDIA (NVDA.US)$、$Taiwan Semiconductor (TSM.US)$，$Alphabet-C (GOOG.US)$Of course, Hong Kong stocks also caught his attention, as he increased his position by selling puts.$TENCENT (00700.HK)$。
Regarding the recent fluctuations in the Global market, Duan Yongping stated: the mountain is still the same mountain, and the beam is still the same beam. This shows that Duan Yongping believes the essence of quality enterprises has not changed, and from a long-term perspective, good companies are still worth investing in.
Regarding Apple, Duan Yongping exclaimed: " $Apple (AAPL.US)$ There is actually still a PE of 31 times! Below 25 times feels much better. Who gets to be the emperor still has to let LBX Pharmacy Chain Joint Stock live?! Buying good companies is more important than anything else in any time and market. If the price of the put, looking back from ten years later, is considered cheap, then this investment is worth making, suitable for both long and short.
Specifically, the options sold by Duan Yongping in the US stock market have strike prices that are almost at parity, meaning the option's strike price is equal to the market price of the underlying stock.
From the expiration dates of the options, they are mainly concentrated in this month, with this Friday, April 11th, being the most frequent expiration date, followed by April 17th and April 25th at the end of this month. Of course, there are also some options that expire at the beginning of next year, with expiration dates mainly concentrated on January 16th.
The following is a table organized by Futu News based on the trading orders revealed by Duan Yongping, which is an incomplete statistic, indicating that Duan Yongping's move can generate over 20 million dollars in premium income.
What kind of trading method is Short Put options trading?
First of all, it is known that buying Put Options or Put options indicates that investors expect the stock price to drop in the future, while conversely, selling Put options indicates an expectation that the stock price will rise or not continue to fall.
Being a seller of Options and a buyer of Options is completely different. When selling Options to receive the premium, the right to exercise is also transferred to the buyer. The risk involved is, for example, when selling Put Options, if the stock price falls below the exercise price, the counterpart buyer may exercise their rights under the Put Options they hold, demanding that the investor buy the stocks from the option buyer at the exercise price, referred to as "taking delivery".
Duan Yongping's recent "shopping spree" was simply selling Put options, primarily hoping to receive the option premium, usually not wishing for the option to be exercised in the end.
If investors are not prepared with enough Cash to handle "taking delivery," this operation is also known as "Unsecured Put options" or "Naked Short Sell Put options." Similar to a Short Call, this strategy has strong speculative attributes and higher risks.
Of course, if the Cash held by investors can cover the corresponding amount when the sold Put options are exercised and they wish to "take delivery" when the price reaches the target, this strategy is called Cash Secured Put options.
While Duan Yongping sells puts, he also cautioned about risks: "A cheap stock is good, but don't use Margin." This aligns closely with Duan Yongping's investment philosophy—emphasizing long-term holding of quality Assets. The essence of selling puts is to enhance the certainty of building positions through premium income, but this strategy's premise is that "Cash preparation is sufficient."
Munger has also warned that when using Margin to sell puts, if prices continue to fluctuate unfavorably, one may fall into a vicious cycle of "constantly adding margin," ultimately being forced to close positions.
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Risk Warning
Options are contracts that give the holder the right, but not the obligation, to buy or sell an asset at a fixed price on a specific date or at any time before that date. The price of options is influenced by various factors, including the current price of the underlying asset, the strike price, the expiration time, andImplied volatility。
Implied volatilityIt reflects the market's expectations of volatility for options in the near future, derived from the options BS pricing model. It is generally seen as an indicator of market sentiment. When investors expect greater volatility, they may be more willing to pay a higher price for options to help hedge risks, leading to higher.Implied volatility。
Traders and investors use.Implied volatilityTo assessOptions prices.The appeal lies in identifying potential mispricings and managing risk exposure.
Disclaimer
This content does not constitute any offer, solicitation, advice, opinion, or guarantee with respect to securities, financial products, or instruments. The risks of losses in buying and selling Options can be substantial. In several cases, the losses incurred may exceed the amount of initial margin deposited. Even if you set up backup instructions, such as "stop-loss" or "limit price" instructions, it may not avoid losses. Market conditions may render such instructions unexecutable. You may be required to deposit additional margin within a short period. If you fail to provide the required amount within the designated time, your open positions may be closed. However, you will still be responsible for any resulting shortfall in your account. Therefore, you should research and understand Options, and carefully consider whether such trading is suitable for you based on your financial situation and investment goals before trading. If you trade Options, you should be familiar with the procedures for exercising Options and the rights and obligations you have when exercising Options and upon their expiration.
Editor/Rocky
