After reading a page and a half of his stuff...
...I was struck by something that did not occur to me before.
Margin Calls.
Sonuvagun. Here I am, thinking Derivative Crisis and other esoteric garbage---meanwhile, Joe Investor is strung out on margin. What a concept.
Some other interesting stuff too, but anyway. I own puts from Wednesday....OEX 915. It might be crazy to buy any puts....the VIX is around 40, I understand. Better, if you must play at all at this point, to be a seller of premium, not a buyer. That is to say....sell calls...if you don't have the capital, then time it so you can leg into a spread. Or do nothing. Puts are trading at premium levels not seen since the crash in 1987.
Hey...if you were the guy writing puts, would you be willing to take the exposure of more downside in this environment? Puts are not cheap, my friend. If you are not writing options at this point....perhaps you might look at futures contracts. I hear the DJX options are still reasonable, but for how long who knows. |
