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Options Made Easy: Your Guide to Profitable Trading, Third Edition by Guy Cohen

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Chapter 5. Two Popular Strategies and How to Improve Them

• Have you ever bought a stock with the view of holding it for some time, but you wanted to ensure against a downturn, just in case?

• Have you ever bought a stock with the view of holding it for some time, but where you wanted to receive a “dividend-like” payment every month for owning it?

• Have you ever bought a stock with the view of holding it for some time, where you wanted to receive the dividend-like payments but also wanted to ensure against the downside?

Well, the answer to all three questions is that you can do them all!

Example 5.1.

Let’s look at buying a stock again:

Chart 5.1 • Risk profile of buying a stock.

As you can see, your risk is what you pay for the stock in the ...

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