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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (35647)	10/9/2009 1:46:14 PM
From: E_K_S	Respond to of 78476

Hi Spekulatius - Re SSBI- Stock looks like it is thinly traded and with a spread of $0.25/share. Did you just have a standing sell order in the queue? Good job if you were able to "scalp" a $1.00/share especially given the low trading volume. I have noticed that stocks that have recently "reversed split" can provide some quick trading profits too. As the stocks adjusts to it's new post split trading levels you usually see a lot of price volatility. There are some opportunities to capture a dividend by buying the stock before the xdividend date and then selling a covered call or doing a swing trade after the xdividend date. The market is not always efficient in adjusting for the dividend payment especially if the dividend is large. Many times I find I do much better buying and holding especially at this point in the cycle. I have been focusing on the stocks breaking above their 200 day moving average on higher than normal volume. If they also pay a high dividend, then I explore a buy/write strategy. Schwab allows you to set "alerts" and I use the greater than 50% volume setting w/ the price at or above the 200 day MA price. "Alerts" are sent automatically to my cell phone as text messages. This way I am aware of potential buy opportunities all through out the day w/o having to be right at the terminal. Many of these stocks make for good swing trades and also possible long term holds (as they continue higher through their 200 MA price). I have also been writing naked Puts (six months out) with covered Calls (six months out) staggered w/ different strike prices on longer positions I want to accumulate. I have positions I am setting up for BKH and LLY waiting to write the naked Put and covered Call respectively. It may take me 30-60 days to get both sides of the option trade positioned. On huge market swings, then you can trade the option rather than the stock (by covering the Call or Put) and then rolling the option to a higher or lower strike price or just taking the option position(s) off completely. Finally, the boring utilities seem to be moving higher again. These have been excellent reversion to the mean plays for me. finance.yahoo.com I am ready to write covered calls on several of these but as I wait for the next expiration period to pass, they continue to move higher. Therefore, I continue to do nothing. When all is said and done, I find I make more by holding and selling (booking a long term capital gain) than using several of these different hedging strategies. If I am not sure of the company (or the economy), I am tempted now to just sell the entire position and visit the opportunity latter. EKS