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Strategies & Market Trends : Dividend investing for retirement
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Celtictrader
To: chris714 who wrote (30960)3/28/2019 9:49:52 PM
From: robert b furman1 Recommendation  Read Replies (1) of 34328
 
Here's a hint regarding what I've found to be very helpful.

Put premiums are always maxed out when fear rules the market's emotion.

I use Don Wolanchuk's clx analysis to determine when the market's fear is peaking.

The value of a put in a down market can swell from 3 to 5 times greater than just a normal bull market.

I usually get impatient and sell too soon - true confession. LOL

I try to sell in three waves - once when it yields 5-6 % on a blue chipper, a second wave when it gets' in the 7%. If it keeps going down from there, I sell the last 1/3 on the next strike price down. More often than not that premium never gets assigned and I take it to reduce the net purchase price (in my analysis) and not tax time.

When it all washes out, I use the current dividend / the net purchase price from the total package of puts sold, and that gives me a return percent on the cash flow my account received from the package of stock assigned minus total put premium.

In my mind, If I get upside down on my cost vs current price, but it is within the dividend received in a year - I don't even get concerned about the trade.

You can learn about clx (short for climax) over on "Wollie's World" at the Crystal Ball Forum.com. Don and a group of clx students check numbers daily. Its the best $14.95 a moonth you can spend. IMHO

Hope that helps.

Bob
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