Ed, I still avocate a 90/10 program, so I'd put $45,000 in money markets and allocate $5000 to long puts and/or calls. Then, if you lose, you are still in the game, but if you hit a homerun, the small positions still pay off.
In that context, I'd go with MU Jan 35s and 30s, Gateway Dec 25s and maybe 30s if you get an up day in the stock, Atmel 35s, MOt 65s, NOvellus 100s, and Western Digital 40s and 35s. I would not buy Octs. Too close. I would buy nothing nearer term than Novs out to Jans, depending on price.
I tend not to roll when I am losing. I tend to let the position expire worthless and then examine how the 10 pct. of my 90/10 stands overall before allocating new money. But that is part and parcel of my homerun approach. Also, if I am going to buy 30 puts, I buy them in 3 thirds of 10. If the first third is a homerun, I don't cry. But if the stock still goes north, I can buy new puts at higher prices. All of this assumes that the fundamentals haven't changed.
MB |
