Would you kindly point me to a good beginner’s resource or primer for trading married puts? I would like to go long on some limited partnerships (they pay decent dividends) and marry them with corresponding puts that protect my downside.
Some gas pipeline and storage partnerships are paying 7% –9% dividend yields.
Buying married puts is exactly the same as buying naked long call options. As far as I'm concerned, that strategy is only for gamblers.
You will collect your dividends with the married puts, but unless the stocks rally, you will find that the puts you buy are going to cost far more than the dividends you receive. And that means you lose money.
But, you did not ask for my opinion on the viability of your strategy. To reply to the question: I know of no books on the topic of married puts. I am aware of two professional services that charge (too much) money for learning how to use married puts. Because I don't want to publicly recommend either, if you send an e-mail to: mark (at) mdwoptions (dot) com, I will send you information on how to find those two services.
One further question to be considered: Are you certain that owning shares of the limited partnership is the same as owning the portfolio of stocks? You want complete correlation (and protection) when you spend money on costly puts. Some of these lp are illiquid and very difficult to exit. Just be careful what you buy, and ask, in advance, how much money you are paying in commissions. Also ask how to sell when ready to sell.
I apologize for not having a better reply for you.
Mark D. Wolfinger
The Rookie's Guide to Options:The Beginner's Handbook of Trading Equity Options
Free eBook: http://www.mdwoptions.com/freebook.pdf