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Strategies & Market Trends : Classic TA Workplace -- Ignore unavailable to you. Want to Upgrade?

To: the-phoenix who wrote (147861)	8/12/2007 9:57:30 PM
From: skinowski	Read Replies (1) \| Respond to of 209892

Sorry to hear that, Phoenix. I hope things work out for you the best possible way. However, I'm not sure this is comparable to my little scheme. Yours was an active leveraged play seeking to capitalize on an expected outperformance of one sector against the other. My idea was A) sell SP calls against existing long positions (most diversified portfolios perform close to the index). B) use the money to buy calls on Gold related instruments, and C) buy SP puts to protect the holdings. For as long as the port performs close enough to the index, the risks are as follows: If SP rallies, the money spent on the put is kaput AND the opportunity to benefit from that rally is lost. If Gold is strong, you will make money. But the only "new" money on the table is the premium for the SP puts. I think it is really pretty conservative. You get to keep your stocks in the port (while protecting them) and you switch your bullish expectations from SP to Gold.