Disagree entirely.
Options, if employed correct, are a great way to balance LT growth with income, and hedge if appropriate.
You're NOT looking at the big picture.
The big picture for tech stocks in 1999 was UP BIG. In this environment, writing ANY covered calls is a sure recipe for disaster. Bull markets and upside mo-mo stocks and CC's DON'T MIX.
However, BULL MARKETS and buying calls mix well, as does Bull Markets and SELLING PUTS.
Which I did successfully. Many here did this too, on JDSU.
So...Here are some generally established rules (50,000 foot view):
1) Don't write CC's on mo-mo tech stocks in an up market.
2) Generally, writing options is more profitable than buying them.
3) 90% of people who buy options, over time, lose money.
4) Use CC's to partially hedge long position, not fully hedge them.
Remember:
1) Writing PUTS is BULLISH. Buying calls is BULLISH.
2) Writing CALLS is bearish. Buying puts is BEARISH.
Know the market flow, and stock and then determine your option strategy, if any.
Steve |
