SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Short-termSelling Puts (Covered Calls by another name)
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: quidditch who wrote (8)2/4/2006 10:02:03 AM
From: Rocky9   of 66
 
"What DEW lines do you guys maintain? (Probably too young to know: "distant early warning"). Is there a subjective or quantitative discipline in place which, if breached, you take your losses and fold?"

1) I'm not too young (unfortunately).

2) I've given this a lot of thought. But I haven't established a quantitative discipline. The one that makes the most sense is have insurance (buying puts far below the sold puts), but I'm not willing yet to pay that price. So, my answer is much more subjective. I try to use companies that I am willing to own, and where I think that I will be able to recover some or all of the loss though call sales in the future. This clearly will not be possible if there is a true market melt-down. But I would be in worse shape if I were long the stocks from the get-go. If we are lucky enough to get a flat/up market for a few months, I'll have enough of the "bank's money" to keep playing for a while. Unfortunately, I do view this (and a lot of investing) as gambling, so the "bank's money" is an good analogy. Of course, given the history of long-term 5-7% increases in the market, investing is probably the only gamble where the odds favor the player and not the bank.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News