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Strategies & Market Trends : DAYTRADING/SWINGTRADING STOCKS with INTRADAY INVESTMENTS
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To: - who wrote (4)5/15/2001 9:41:20 PM
From: Dan Duchardt  Read Replies (2) of 565
 
Steve,

Thought I would post to let you know of my interest in your new thread, and potentially in your service. Appreciate your reply to Cormac. I was especially interested in your comments on options.

We like to sell Premium

I like that thought!!! I've been dabbling with some collars the last couple of weeks on QQQ and some volatile Nas issues. Today I was short JNPR MAY50 going into the FOMC thinking a cut of anything less than 75 bp would not drive the market up, and anything less than 50 would surely bring it down. While time seems to be proving that true, I sure got fooled by the uptrend after the initial pop and sell down. My "stop" plan was to roll out to the JUN50 and collect more premium, which I did for an extra $3.40 on the exchange, and cover the call with stock when I wanted to be "neutral". I managed to stay short naked calls for about a quarter of the sell off, but covered too soon and rode it down. Hindsight is always perfect. Looking forward I will trade the stock to create a net short call or simple covered call to hopefully improve my basis, and look for a good entry on a short put if it looks like a bottom. For now I am focused on using the stock to bias my net position long or short; my hope is to use the stock to at least protect the time premium collected. The advantage of using the stock instead of jockeying for position with the options is the tighter spreads and high liquidity. I've thought of using options to limit the downside and maybe even lock in some profit, but have not yet resorted to combined bullish/bearish spreads.

I would be interested in seeing any examples you might care to post of your trades along these lines.

Thanks for the thread.. and good luck in your new venture.

Dan
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