The action in SUNW was disappointing, but I guess it was a matter of time before some money moved out. I bought some 90 Jan puts this morning to insure aganist any big down move. Also sold covered calls yesterday for Jan 95s (was kicking myself this morning when it opened up at 94.5).
I have a feeling that today and tomorrow morning may see the short term highs in NASD for a while. Practically everybody has truned bullish over the last couple of days, and that sentiment is usually coupled with profit-taking. I have been selling Feb calls on most of my positions that have run up substantially in the last couple of weeks. The premiums are really good on options.
I pride myself in being a long term investor, but I have to admit this run-up has left the techs a bit too frothy for my comfort(just like last Oct was an over-reaction). Due to this I have been lightening up
on shares such as ASND, NT, KMAG, INTC, IFMX, COMS, AMAT that I have held for a long long time. I think the odds of a 10% down from here are significantly greater than a 10% up from here (80-20), and that is just too much risk (IMO). Also the high volatility has caused premiums on put options to go up quite a bit, due to which I am hesitant to buy too much insurance in a rising market.
Last summer Addi and I got into a debate about what constitutes long term investing, right after Addi sold some of his SUN position. I have to grant that it is prudent at times to take some money of the table even if you are in the market for the long haul.
Regards
Alok |
