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This technique allows traders to handle moderate price declines because the call premium reduces the position's breakeven.
Reporting second quarter results in July, SanDisk Chairman and CEO Eli Harari Eli Harari said, We expect product gross margins to improve gradually in the second half of the year, driven by more moderate price declines resulting from an expected improvement in the balance between demand and supply, declining manufacturing costs and strength in our income from royalties..
"There's a price decline.
High quality at a moderate price.
Those duplicate orders are expected by many to lead to moderate gluts and subsequent price declines in the first half of next year.
The sell-off went so far, so fast, that the outlook for further price declines has moderated.
"Other price measures, including the LoanPerformance, Case-Shiller and Radar Logic figures, have suggested that price declines are moderating, but they are not as strong as the FHFA index," JPMorgan's Reinhart said.
Perhaps most importantly, moderate inflation keeps the economy at a safe distance from deflation, or general price declines, which can freeze activity as would-be buyers wait for lower prices.
–In the U.S. there is evidence that price declines in some of the worst-hit markets, such as California, are moderating.
Sears' Chapter 11 filing capped a long decline for a company that sells an array of merchandise — including apparel and appliances — at moderate prices for value-conscious shoppers.
But Mr. Price declined.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com