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Strategies & Market Trends : Option Spreads, Credit my Debit
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To: Iraklis who wrote (1136)1/9/2000 10:11:00 AM
From: tyc:>  Read Replies (1) of 2317
 
You and I have exactly the same objective. I too am looking for some discipline for my "gut feel" approach.

My usual routine has been first to buy stock of a company that I am bullish on. When the price goes up, I realise that covered calls are attractive so I sell calls, making a mental note of the downside break-even. Then I realise how converting the covered call to a short straddle by selling puts at the same strike will enhance the situation.

From that stage, it should be possible to ignore the underlying common stock position, adjusting the short options to modify the profit profile of the short options. One should be able to sell the common, or retain only sufficient to ensure that the overall position has the delta bias to satisfy your "gut feel".

Right now on the Canadian market I hold such eclectic positions on T.ATI (nasdac ATIT), T.PDG (Placer Dome), T.dfs (Dofasco), and a nascent position in Power Corp (T.POW).

Instead of discussing academic rules out of a book, would anyone be interested to take part in a discussion of actual positions; the attactiveness of the profit profile vis-a-vis technical indications on a chart, Bollinger bands, RSI, etc. If you look at a chart of DFS (dofasco) and of PDG (Placer) you will see two diametrically opposed positions. Would it not be interesting to discuss what short option positions are appropriate to each ?

Any takers ?
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