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Strategies & Market Trends : Option Strategies
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To: chris714 who wrote (1998)10/18/2018 3:10:00 PM
From: Thehammer  Read Replies (1) of 2591
 
I heard a proposal once to short both sides of a triple leveraged ETF- that made more sense to me other than arbitraging s/t positions. I sat through a few presentations on them given by people who really didn't understand them. You can get the trend right and still loose because they reset every day.

Do you find it advantageous to alter the strikes frequently?


My take is that all depends on the underlying security and your outlook. Then you look at the economics of the situation. While I never initiate a deep ITM position sometimes I get there because of a big decline and subsequent roll.

If I rephrased your question though, I might say that I only alter the strike if I find it advantageous. If I can roll down and still get a decent credit, then I may because of less exposure. However, if you believe the market is mispricing the security then you may want to stick with a higher strike.

Another aspect is volatility. When it is high, you can get some juicy premiums,

Looks like Icahn likes NWL. I have not looked at it enough to render much of an opinion. Obviously going through a bad stretch. Highly leveraged but selling assets (perfunctory glance). Probably worth more of a look as a value play.

In 2009 , I had a lot of puts assigned. It overall worked out very well. The trick is to have large cash position at the bottom and time into the rise (or be short at the top). ....
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