Anthony, increase returns? Yes, if timing is correct, one can increase returns. How about 1987? Did investors increase their returns with sold calls then - I don't think so. Except for the little money they received for those sold calls, they lost their shirts. Also, people who have sold the calls have had their stock called away from them or have had to rush in and cover them at a loss to keep some of their gains on the stock. And, since there is up to a 2 day delay in notification by the Clearing House through the broker to sellers of calls that the buyer has exercised the options, there are times that the seller has already covered his calls by buying them back and then comes to find out those 2 days later that the stock has been called away from him and he is in another position with options unintended. Think not - read the Characteristics and Risks of Standardized Options that all brokerages are required to give those that are trading options. Remember, I'm a pro - I know the rules backward and forward and I also know what can happen. In my opinion, if you think that a stock is going to go down, you sell it and vice versa - getting all that you can and not worrying about your securities being called away. For those investors who worry about taxes or may want to lock in their gains until the next year, shorting against the box is more preferable for hedging. You won't share in any further gains, but at least you will have protected yourself without losing any of what you have while achieving your goal. As far as what percentage gains I have against losses, etc. - I've said before that I let my 36 years plus in the business speak for itself. Obviously, I'm not broke. Many people just can't understand how traders can make the money - and that's usually because those people always think that the traders do things the same way they do. Good trading. Jack
I believe this is note 4 of mine for the day; SI is cutting me off after 5 notes per day for my first 30 days here. So, if I don't answer right away during this period, all will know why. |
