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Strategies & Market Trends : Options
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To: taxman who wrote (5566)3/27/2000 8:51:00 PM
From: Kayaker  Read Replies (2) of 8096
 
listen to the taxman. do not sell puts or calls. buy them.

What strategy makes sense depends on many different factors. Right now I'm about 90% LTB&H. With the remaining 10% I mostly buy calls (usually DIM LEAPS) for short term moves (DIM LEAPS because I'm already a light sleeper). I generally don't like CCs, but in some situations it makes great sense. I've written July 250s on QCOM 3x now. If I lose the stock for 250 in July I'll be extremely happy and I'll retire. On the other hand, I also have lots of JDSU long stock but I don't write CCs on that one.

I'm fairly conservative so I don't like to buy on margin. But using some margin to short puts makes sense to me. So I'm short some CNXT July 60 puts and JDSU Jan 01 100 puts.

If I hit my overall target, I'll probably sell everything, collect 4-5% interest and short puts conservatively to supplement the interest income. It will be low risk, require minimal supervision and I'll go to New Zealand for the winter.

For most of 1998 I was often 100% long calls (Dell). I was comfortable with that at the time (until I got smacked in the head in early Feb 98). I had less money and was willing to be aggressive. But as I accumulate more $$$ my strategy changes.

What strategy makes sense also depends on your personality. That's something I learned early on from reading the "Market Wizards" books. There are many different ways to make money in the market -- no one way is the right way.

My 2½.
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