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Non-Tech : Kirk's Market Thoughts

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Nov 14 9:30 AM EST

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To: Kirk © who wrote (6037)	8/6/2018 8:37:28 PM
From: Jerome	1 Recommendation Recommended By Kirk © Read Replies (1) of 26518

An option strategy for the Trump years. The whipsaws in the market are due to the uncertainty of Trumps financial goals . What looks like a good bet today may look like a poor selection tomorrow . That's all it takes are a few misguided Tweets that are always rearranged within a few days. A stock may drop in few hours and take a few weeks to recover.This is the market we have to live with. For this market I suggest the following. Pick a stock that trades in high volume and is at the bottom of some sort of channel. Don't get too hung up on the stock metrics or the stock headlines. I believe that this called a long bull spread.... 1)own the stock . 2) buy and option slightly in the money (one month out). 3)Sell a covered call well out of the money Examples... INTC and MU.... both are good call writes. MU closed at 52.67..Buy the August 24's.. 51 strike for about $238. and sell the Aug 24's ...56 strike for $52.00 INTC is about the same ...Buy the 47's and sell the 51's Same dates Aug 24 expiration....There is a caution with INTC, in that they will soon announce a new CEO and that will trigger some stock price movement. If you are holding a good hand of stocks that are not. appreciating as you think they should... this long call spread will buy you income . Swapping stocks to gain from momentum is always risky. It frequently happens that the stock you sell begins appreciating after you sell it. And you new buy turns out to have peaked just as you bought it. Another caveat... as the covered call premium starts to depreciate with time...closeout he position when it get to under .10 cents. If you are at risk to being called out of a position...the day prior to expiration buy the option back and write another covered call a few points higher.. This avoids a capital gains tax on the stock .And your long option will be nicely profitable. I have used this strategy this month on MU, INTC, BAC, BP, Clf, VALE, CY, ON, AMD and CHK... This is a good past time that should keep you mentally sharp. ..

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