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Strategies & Market Trends : Options
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To: Ritch who wrote (2967)2/15/2000 11:45:00 AM
From: SecularBull  Read Replies (2) of 8096
 
Ritch, I hate to give advice to people when it involves covered calls or writing puts. I'd hat to see you get called, so the decision is yours.

I will say that now is not the time to be over-extended into margin or heavily invested in options. I have been reducing margin as a percentage of total assets, as well as options relative to total assets. This is a defensive hedge, because I am uncertain about where the market is headed in the short term. The best rule of thumb is to be prepared for a drop of at least 40% in the value of your account (higher percentage if you're overweighted in options).

I'm sure that some will suggest different rules of thumb, but those are the ones that I feel comfortable with.

Regards,

LoF
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