Tuck,
Now I'm going to have to go look at the "rolling Up" concept. I am a cash/compounder however, so it may not pay for me.
What I like to do is use the daily TA charts to qualify a stock that is moving up, but is maybe 1/2 below the next strike. Using Poweropt.com, I only pick those plays that will return greater than 10% per month (using margin) (I have my own excel calculator to do this). This almost always leads me to the nearest exp. date, no matter how close it is. I could write CC's right up to the date of exp that would do this, since the time period shortens along with the ROI declining. I then immediately roll the cash from the premium right back into the market (at double the buying power from margin), and I pick a new target. My intent is to get exercised every time on every stock. That gives me cash in the account to pick all new, high ROI targets every month, thus letting me use my hard won, already paid for in spades, day trading experience, over and over again. I will trade into these new, highly qualified by TA and FA, positions for as long as I have buying power. I usually get at least one or two qualified trades in my price range, $10-$30, every day. Obviously, not all stocks cooperate by staying above the strike. If they land between my price, and the strike, and I re-qualify them for the next month, I do them again. If not, I sell them so I have the cash to use on better plays. If they go below my price, but not below my nut, then I have the usual McMillan plays to follow to correct things. If they tank, while they are tanking, I do lots of day trading techniques, including playing the "dead cat bounce", to get my nut back below my cost. This usually happens around earnings report time, so for that month I always buy a cheap protective put to cover my downside some. Lots of trading action in this, which is what I love anyway. My account is currently compounding at a rate of about 15% per month against my original cash investment, without huge speculative risk involved like you get with day trading. |
