Tom,
Curiosity is getting to me....RMBS. Are you covering? I know you like having 1/2 covered and letting the other half ride. Is this your position now with rmbs, or do you see such a big upward movement after FUD and lawsuits settle that you are leaving them uncovered? If you are covered, what month's and strike's do you have?
I grabbed some rmbs at $71, write aug 75's and let it get called. Bought back at $84, waited til it hit about $89 and then wrote the sept 90's. Bought more at 92....bought more at $88, and none of it is covered. Anyway, With rmbs at $75-$80, obviously I am not getting a decent premium unless I write atm between $75 - $80. If I do this, and if rmbs moves, I will have to roll up and out, due to my higher initial cost. Leting them get called at $80 means I lose, or come close to breaking even due to premium received. I aint in this market to break even, or lose!.
My dilema is this....I could pick up a few grand by writing the oct $80's right now, but I dont want to give the stock away at $80. The dilema is the time os year. Part of me is saying this will be a rough 6 - 8 weeks, and I should cover everything, at the money. The other part of me says as soon as I do that, this market takes off....and with issues like rmbs and sndk, a little news could move them upward in a big way..........so I sit and ponder what to do.
My guess is you recommend I cover half and worry about it at expiration, but any thoughts will be appreciated.
Thanks, as usual...
keith@haventevenlookedtodaytoseewheremarketis.com |
