Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Swing Trading With Options -- Ignore unavailable to you. Want to Upgrade?

To: underdog430 who wrote (73)	10/9/2001 11:07:18 PM
From: Dan Duchardt	Respond to of 88

Mark, My swing trading hasn't been going too well If it's any comfort, you are not alone. I need to be more patient at times, but of course there is no way I could have predicted the events of the last month. One thing that is becoming more appealing as the market retreats is diagonal spreads with long LEAPS calls and short calls a few months out. You need a fairly long time horizon, but assuming the economy is going to recover someday, the LEAPS afford downside protection against a long term decline, and protect the short near term calls against a sudden sustained rally. It should not be to hard to get some number of LEAPS paid for with short call premiums, even if the market stays down for a year or two, as long as it does completely collapse. Those vertical credit spreads can be good if you are right about market direction. Lately that has not been easy. I saw some stuff once about some guys doing OTM credit spreads for relatively small credits, with high probability of worthless expiration, but with the % moves we have been seeing lately, that does not look very appealing to me. Dan