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Strategies & Market Trends : Classic TA Workplace

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To: Win-Lose-Draw who wrote (158502)	1/1/2008 6:42:45 PM
From: skinowski	Read Replies (1) of 209892

"The Niederhoffer" :) That's a great name for the strategy... and an appropriate way for Victor N. to achieve immortality... LOL! (This man, as I recall, was reputedly the best trader in the world, a buddy of Soros, who blew out a serious number of millions of client's $$$ selling naked puts into the Oct 1997 crash). A naked put has the same risk profile as a covered call, but the latter also captures some of the upwards move in the underlying (plus the volatility and time value part of the premium, in addition to the yield)... it is a more bullish stance. And the naked put on the underlying is not a great problem if I am interested in accumulating some more. I don't mind dividends. I own some BP for about a year now, against which I wrote OOM covered calls and used (most) of the proceeds to by puts. By now the calls are somewhat in the money, and I'll let them have the stock later this month. I think my total will end up being about 11-12%. Not great, but better than bonds... and probably less risk... -g

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