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Non-Tech : The Critical Investing Workshop
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To: Uncle Frank who wrote ()1/20/2000 6:23:00 AM
From: Pescador7  Read Replies (4) of 35685
 
Voltaire and Thread:

I have been lurking for a while now and I would just like to get peoples opinion on the following strategy:

Since we all seem to agree we are due for a correction after the earnings run (sparked by AG, interest rates, the weather, whatever) and since it is so difficult to time the exact date of the correction why not use the following strategy:

1. Sell off all near term calls into earnings rally
2. Hold all common (do not hedge prior to correction)
3. When the correction arrives, sell at the money PUTS to collect high premiums.
4. Use premiums from PUT sale to buy Q Leaps at a discount since Q will correct with the Naz.

The advantages of this strategy vs. selling deep in the money calls prior to the correction would be you don't have to time the event. You simply wait for the correction to happen and then act.

Would love to hear the thread's comments on this.

PS...I also would like to thank Voltaire, JW and the rest who inspired me to purchase this great company.
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