what's your strategy, if i may ask?
It's been mostly calls, but I also got lucky buying stock on the cheap.
My strategy has been as follows: during corrections or pullbacks (there have been several since August), leverage self to the hilt. I'm talking down to 30% equity if you can get away with it. Buy out-of-the-money calls in high volume Internet stocks, as well as a little straight stock in those companies. Wait for (so far) inevitable recovery, and sell calls at 300-600% gain -- note, so far, I've sold too soon in all those cases, e.g., YHOO Jan 190s, which I bought at $21.50 and sold a few days ago at $86.25, and which are now trading at almost twice that. Selling the calls is usually more than enough to bring yourself back up to 100% equity, and you now have all the stock you bought cheap, which itself has also appreciated.
Caveat: if you guess wrong during a correction and the day after you buy the market keeps dropping, YOU LOSE EVERYTHING! Fortunately, it hasn't happened to me yet. |
