For whatever is worth:
For a little over a month now, I have been using options on EMC, what I belive is called "combinations" or "short strangles" (selling naked puts & calls) to profit from the swings in this stock. I am using an approximate range of 10 to 15 points, (given the swings of the stock and the rich premiums paid).
The use of naked calls(*) is done sparingly and when the short term down trend is more accentuated than most times. I keep a close eye on the stock, at the first sign of an upswing, I buy the underlying to make the "naked call" a "covered call". (the 10 point spread allows me some space to "think" before buying said underlying, a naked call in this stock could prove rather shocking at times). ---> ah yes, but the premiums make well worth the risk taken. [yes, I know, it is greed that makes me do it].
So far, this plan has proven profitable. In this way, even the "forming a base periods", (assuming that is what these are are, or are so called), can be profitable. EMC fits well to my scheme.
Gaston.
(*) don't do this at home, (without securing a rich uncle willing to lend you $$ interest free, first), it could get nasty. |
