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Strategies & Market Trends : Calls and Puts for Income -- Ignore unavailable to you. Want to Upgrade?

To: Robohogs who wrote (4823)	2/20/2011 10:47:54 AM
From: Robohogs	Respond to of 5891

Anyone else having trouble in this mkt? I have sarted going bi-directional after starting mainly as a put seller. The problem is that the short calls are murder in a strong trending mkt. Playing some of the higher vol stocks, i had several move 20+ % straight up after a 4-5% headfake down. Adjusting collars for move 1 kills int move 2. I can never decide whether to stay and figt or take losses. If i take losses stock often reverses as I get out. And if I stay in, it keeps going. I had 2-3 losses of 3% of portfolio value this last cycle but ended up 5-6% on sheer number of winners despite the big losses and another loss equal to 2% related to put spreads on indices given my overall bearish inclinations. I flipped from uber long to flat in Sept/Oct which has made life tough in this rampaging bull which has gone 100+ days wthout more than a 3 day correction if memory serves. Partof the above is selective memory as the big losses stand out due to human psychology but feels like I never get it right despite trading around broken positions. I may return to roots of only selling puts on companies with cash equal or more than the strike. Also I would include what I call anti- bankruptcy plays, i.e., selling Cal 2.5 and DAL 2.5 puts back when stocks were mid-single digits. Last part of this strategy is selling calls against obvious bankruptcies which worked well for me in TMA and CIT but killed me due to a stampede before the bk in ABK. This also worked well in some over-hyped bios (CTIC to name one, MNKD as another). This did kill in HGSI which went to 2.5x my favorable expectation on trial results. I was working with house $ there though due to previous call buys into my target. Jon