“Just commenting on the APPL short. Would it not be better to sell puts 10 – 20% out of the money. After all, collecting premiums is what the insurance companies have been doing for decades? I hope it works out.”

Eoin Treacy's view Thank you for this email which raises some interesting points. Selling calls would be a legitimate way to express a short-term negative view on a share, particularly one that has been racing away from its trend mean and where the likelihood of a reversion is increasing.

I suggest it is probably most appropriate for someone who already has a long position so their options position would be covered. For an investor who does not want to sell a favoured long-term position but who does want to benefit from a temporary setback, selling out-of-the-money calls are an attractive proposition. I would stress that one should be comfortable with options trading before following such a tactic.