Wstera,
I have had some interesting PMs with RR, who only buys 4-6 months out, with a coffer of 4 stocks at a time. He's done amazingly well. I like to buy several months out myself, to avoid near-term volatility, which can deflate your options and force you to miss out on a run. Since most of us expect a bull market this fall, we can take advantage of it by buying January.
As far as open interest, RR also told me he often makes the market in a strike price, and has no problem unloading the calls when the time comes. He may have as many as 1,000 calls at a single strike and that's 95% of the open interest. Traditional wisdom says don't make the market like that, but it works for him. Interesting.
Volty says, "I never recommend near-term calls without calling it going to the casino, he was basically placing bets on a roll of the dice, and most of the time it comes up snake eyes."
Jillster |
