Invest and Trade Profitably with Jon Johnson

Looking at downside play 6/7 for AMX please explain how you figure a 40%ish gain on a 3 point drop of a 55$ stock?

August 30, 2000

The play is with put options going long versus shorting the stock. Using these options we get much better leverage on the same downside move than just shorting the stock. This way we can take advantage of individual legs lower in a stock’s decline, limiting our time exposure in the market and leverage our returns to make better use of our time and money in the market.

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