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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 414.48+0.7%4:00 PM EST
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To: Seeker of Truth who wrote (135)8/30/2005 2:52:40 PM
From: KyrosL  Read Replies (1) of 219168
 
By "added" I meant that I bought puts.

I have three put positions: URBN -- Message 21637393 --, MBI, and GM. Sometimes I speculate with near term in the money options. They are a tiny percentage of my portfolio. Since I expect a drop in the market between now and October, I buy puts.

So far in 2005 all the puts I bought have been profitable. Apart from luck, I think the main reason is the very low time premiums that are nowadays demanded by option sellers, as illustrated by near record low VIX. It's interesting that the market expects low volatility at a time when risks for high volatility "events" are skyrocketing, IMHO. Consequently, the "buy low sell high" strategy at this time favors buying rather than selling options. But I could be wrong, of course.
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