If you were writing CCs now on USRX, (at what you thought was a local maximum), would you sell in the money, or out of the money calls?
Depends (doncha hate that answer<G>) There's more than one way to skin a cat.
Back in Nov(?) when we popped to 80+, the charts formed strong resistance. When we retested and failed, I took profits with my CALLS.
Some of the others were writing CALLS, DEEP in the money, at the money and outta da money.
Others were writing Naked CALLS. (Scary, not my cup of tea)
I'd start off conservatively and find out where my level of comfort is. Everybody has a different style. As long as you're making $$$$, there is no RIGHT way.
Is buying back in the money calls on downtimes a smart strategy?
You bet. If you got a decent price for the CCs and the price goes low enough to replace them for a decent profit, Do It.
You may even be able to repeat the whole process. Charts will give you some parameters for upper and lower limits to go by. |
