Mike,
Your option play is definitely a long winded one but it sure looks like a decent hedging strategy although I will admit it takes some time to sink in the different outcome and risk/reward. Just a thought, if you own the stocks, wouldn't it be better to sell call rather than buy puts? In this way you will get paid upfront and also get to earn the ever decreasing time value? Of course in a super dee duper LT selling one will be limited in how much one can make but that 5 or 10 points would be pretty good in a few weeks.
Does your Schwab broker allow you to execute stop order for options? I presume you are in Cleveland. Any chance you are in Mentor?
Did anyone catch the CNBC report on the car service front desk guy who trades stock in his back office? They make it sound so easy and I think this trend is catching on nationwide like a wild fire. To be honest you and I and many here are already doing some variations of internet/electronic trading (except LT who is a Roman and still stuck in the 1st century full-fee broker age <gg>). What this contributes to is mo-mo. It used to be only the big boys are doing this mo-mo thing but now the big boys themselves are not so sure anymore. Many small pistols can concur a village a large cannon cannot. Unless, of course, the pistols are fired from the golf carts which are moving too slow but this is another story... Net, I don't see mo-mo going away if we go into a bear market. Again, the drillers serve as a great example of what mo-mo and reversed-mo can do to the stock price.
I was really tempted to cover AFS today as I saw KRB went on a two day ultra-mo ride that wiped out 7 pts of my Sept 30 put gain. It was zooming up like a wild bicycle out of control and I was really tempted to want to protect my AFS. LT reminder came in the nick of time and I immediately pulled my buy cover order out. Feeling vindicated, I shorted KRB late in the day as well. Talking about emotional... Need more discipline, who took my Papai can of discipline? <GG>
Evil tower - this is truly one of the stragest duck I have owned and seen. No volume after 1 hour of trading and then the bigger trades came. Look to me like the small players like us are holding on our shorts and longs and the MM's are buying and selling to each other. Insiders are also supplying the shares for sales too. Since Shelia thinks they are nice people, I had better upgrade my impression of them. Let's call them the moody tower instead. |
