I just want to pipe in here about selling puts, buying puts, selling calls etc:
I learned about selling puts through ed's very generous instruction last winter, spring and summer. He's a great teacher, too, as he focusses on the essentials. After some study and trying it out, I found it was an ideal way to make what he calls "crumbs" every month by selling the puts on way oversold drops and then usually buying back once they had deteriorated 50-80%. That often happens very quickly in this volatile market, which he has characterized as volatile with an upward bias, not bear, not bull. Perhaps in earlier times without the volatility and rich premium one could not "steal" premiums that easily.
On the other hand, taxman has explained to me his strategy and how well he has done with it, and it is fascinating. I might not use it myself, but in this market there are different strategies for everyone. I am sure he'll answer for himself but it is quite possible he has experience with selling puts and didn't like the result. What is really interesting to me is that he buys calls and puts, and eventually exercises the calls. It's that simple. And when you think about ed's point--that buying calls is going long the common--(though you get more leverage, and you don't generate margin collateral in your account)--you can see why taxman's strategy works.
This thread, I hope, will show us many successful strategies, and we'll pick those that suit us. |
