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Strategies & Market Trends : Short-termSelling Puts (Covered Calls by another name) -- Ignore unavailable to you. Want to Upgrade?

To: tuck who wrote (6)	2/4/2006 8:50:49 AM
From: Rocky9	Read Replies (1) \| Respond to of 66

"My time frames are shorter than Rocky's" I left out a word (I do that all the time and it drives me crazy). I use a 5-6 WEEK time-frame. I think that is where I get maximum volatility. If I could get ~5% a month, that would be around 50% after-tax annually. "shorter time frame probably demands more attention" In spades. That it is the downside - but lots more potential return. Plus, I have to have twice the capital committed for a week or two while I have two months in play. If we have a real bad market where most of one month's puts will be exercised, it will mean that I should write calls on the Monday or Tuesday after expiration, but at least only one months capital will be committed.

To: tuck who wrote (6)	2/4/2006 9:37:16 AM
From: quidditch	Read Replies (3) \| Respond to of 66

I will add one word of caution here: I was selling naked puts quite successfully on an array of tech stocks during 1999 and early 2000, and of course we know what transpired. As portfolio values came crashing down, I was not a happy camper to have put to me a lot of shares of companies that no longer looked so attractive :-( I wonder whether this bull ride in BTs we've been experiencing isn't luring us into a false sense that there is a price floor here that will not, on a broad range of names, be penetrated. What DEW lines do you guys maintain? (Probably too young to know: "distant early warning"). Is there a subjective or quantitative discipline in place which, if breached, you take your losses and fold? Or, are you willing to buy these names and live with them at the indicative strikes irrespective of the tenor of the BT or overall market?