Tip, Spacing the buys and sales of thirds is more art than science. I prefer to buy a first third of puts at what is at least a short term high. After that, it gets tougher. In general, I try to enter the second and third positions based upon what I consider the fair value of the stock and the percentage variation from that. Still, it does matter if that stock is an Amat or a Micron Tech. I am more likely to buy thirds of puts with fairly close strike prices on an Amat, because it is a good company and, in my experience, less unrealistic touty than most. With an MU, the price is so far beyond fair value that I space my thirds more. If a stock like AMat is 50% overvalued, you have some reality upon which to base decisions. But when a MU is 500% overvalued, or, as it was at one time, 2000% overvalued, there is no reason for it to be there and no reason for it not to go to even sillier prices. With an index, like the XAL, I tend toward tighter strikes than I would for an individual stock, even household names like Delta and AMR. But that isn't true of all indices, as I treat the IIX more like Micron.
I know this doens't help much, but each issue has a different war plan, and each plan can be changed by different events.
MB
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