Hi ed...premiums definitely are inflated lately, and it does seem a good idea to watch the premiums and take advantage of the volatility, I remember you used to do that with puts also, sometimes even if the stock goes slightly against you, you can still make a profit on buying back whatever you wrote (call or put)
I think it just takes that discpline that sometimes its hard to have in this market
Horror stories: Talking to my acct about what happened to some people in 99 and 2000, esp those who didn't have mark to market, they made a million or whatever in 99, but must've been on margin, anyway in spring of 2000, meeing margin calls, they deferred taxes hoping for a rebound, but instead market continues to go down...some people are wiped out and will have to declare bankruptcy--he has clients who held from 150 down to 8 on whatever stock (those were #s he quoted)
I guess part of managing trading is taking the long view on what profits and losses you might have, the leaps, you get the $ but until you close the position, you don't have to pay taxes on it, and can put it to work--------- |
