Dr Id:
The main reason I suggested writing CC when RMBS was at 85 was not only based on "Buy on rumor and Sell on the news",
(the news about Toshiba came out before the market opened) but that day was expiration for options. Short covering was
immense and that significantly contributed to the huge spark of the stock. Next week we don't have that option expiration
short squeeze so a pullback might be expected. When that happen, then you can complete shorting a strangle by selling
puts. Should another news come out, like Hitachi, then you can buy back the call, even at a higher price, which you can
afford because you have collected the premium of the naked put.
Just a thought, and not intended for an investment advice.
Best of Luck,
Paul
Paul,
The events of the first two days of this week are why I've stopped writing covered calls (at least for now.) Rambus should have pulled back based upon your very logical arguments. However, the stock has moved close to 100. I have found today's markets so hard to predict, that with stocks such as Rambus (which has never traded in a very predictable range) I tend to just buy and hold.
Dr.Id |
