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Strategies & Market Trends : The Covered Calls for Dummies Thread -- Ignore unavailable to you. Want to Upgrade?

To: adairm who wrote (1213)	6/25/2001 3:04:09 PM
From: hivemind	Respond to of 5205

In general, I agree with and do practice writing puts on quality stocks that have cratered. I protect myself by diversifying by industry as much as possible. I never sell puts in aggregate for more stock than I want to buy, and I always make sure I do this on stock I wouldn't mind buying at the net cost (strike-premium). It's like placing GTC limit buy but getting paid for it even if it misses. Playing a dead cat bounce is more of a (very) short-term trading tactic, where I view put writing as part of a longer-term tactic for income and below-market stock acquisition. I like to balance annualized premium income against specific dollar-value downside protection provided in the position. I refer you to a prior post which is specific. I hope referring to one's own post is not considered poor netiquette: Message 15952915