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Strategies & Market Trends : Portfolio Protection + Money Management for the Long Term

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To: BDR who wrote (26)	4/10/2000 2:53:00 PM
From: Tom Trader	Read Replies (1) of 57

A strategy for protecting portfolios Several weeks ago I had sent a pm to Iqbal Latif who is one of the more astute contributors on SI. I wanted him to offer his thoughts on how best to achieve portfolio protection. Iqbal has wide experience with global markets and has an almost uncanny sense of market direction and sector rotation. For example he was one of the very few people who went on record shortly before the tech stocks dived that the best risk/reward was in the old economy stocks. At other times he has been very aggressive in recommending tech stocks. He is not a gorilla gamer by any stretch. He has given me his permission to post his response -- and has indicated that he will be willing to clarify any questions that anyone may have. He usually posts on the following thread: Subject 14747 The following was his response in the pm that he sent me: SPH options in fast market on break of supports are the best. QQQ puts are good too, but one needs to establish the sensitivity of its exposure I would assume that SPH and QQQ together in tandem provides adequate cover.. In fast market dynamic hedging is the best strategy like buying 2 puts of SPH for every 100000 $ exposure, for 500000 $ 10 puts on SPH will give you good returns although the outlay is huge but possbilities and protection accorded is great. Out of money covered calls for near months and far months puts on indexes establishes a good nest of support strategy.. One can buy puts cheaper in a uptrending market and sell calls at higher premium, I will use this for some of the stocks that I will consider may have some time to move.. SOX PSE DOT are great indexes for protective puts, I use SPH as the first line of defense and these come when 1342 gets broken or we see a major reversal in sentiment of the market. I had sent you ealrier a detailed reply it was lost as I had not saved it I just sending you a summary of my earlier post..regards. Ike

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