less. I have been doing that. But your strategy's cost is still a little high as it is around $2.50.
My purpose is to minimize the premium, that is why I do bear put spread, and use the premium from far out of money calls to achieve that (I still prefer not being called even if it is just 1/3 of my underlying stocks). The idea for the options is to not touch the stocks but still have protection for them. I think your way does not cover the loss between $122.5 and current price of $130, but cover anything below $122.5, while my way cover the loss between $130 and $118, but does not cover the downside risk below $118 (assuming your scenario). I limit my downside protection to the price I anticipated it would fall, so I am good with it, while also minimizing the premium because of this strategy.
