What a week! Congratulations to everyone who made it through. I don't know about anyone else, but I came through bruised but not battered :-) But real bruised.
I sold off a lot of stock Tuesday morning when we were a hundred or so down, but by the time the trades executed we were a couple of hundred down, so I lost big time. Felt bad about selling, but on a day like that I had memories of 1987, and LTB&H is not always 100% the right thing to do. I also realized I need to be better hedged for this kind of market. I bought May, July, and October calls on the way up, but again because of the delays by the time they executed I missed a couple of hundred points. At least the calls have appreciated beautifully since.
Now, for my hedging strategy, getting ready for earnings the next couple of weeks, I bought combinations of common and puts on qcom, emc, and aol. One put for every 100 shares. I don't know what this is called, married puts? Anyway, this is my current strategy for taking advantage of pre-earnings runs while hedging my downside in case Tuesday rolls around again.
I plan to close my calls through earnings, and either convert them to common or to a combination of common and puts. I will be either heavily hedged or in cash as we exit earnings season and the focus returns to the Fed.
Any comments on using married puts as a strategy in this kind of market? |
