Would anyone buy Puts on OMX?

Answer 1

no i didnt

Answer 2

That's kinda like asking if anyone would like to stand in front of a freight train.

The parabolic rise of OfficeMax from 24 at the beginning of the year to over $44/sh, is not a Blowoff Top, but rather a new development of value.

The technical pattern is one of consolidation, not a topping pattern. It is called a Flag or Pennant. It looks so inviting to the downside because it has so far to fall, and of course, it could.

The odds are in favor of the trend, and the trend is definately to the upside. If the market doesn't fall out of bed, this stock is still a "Buy" in my book.

Now the other half of your question: "Would you buy a put?"

Have you made money "buying" options over time? Do you realize what a fool's game that is? Do you realize that all options are designed to expire worthless? Did you know that 85% of all options expire worthless? This is by "design," not by accident. They are designed to be used as a hedge, and are definately not a valid "investment." Investments do not waste away with time.

You may think your risk is less because of the small amount invested, but with only a 15% chance of success, your risk is actually immeasurable, astronomical, even if you only invest one dollar.

Spreads are a different matter, where the option sold offsets the wasting time factor of the option purchased, particularly if you can leg-on to the position on dips and rallies.

Trade on margin, yes, but options are a longshot, unless you sell them. Sell the call, yes, but buying the put would be reversing the odds against you, exactly the opposite of what the pro does.

Just go to Vegas if you like reversed odds.