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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives -- Ignore unavailable to you. Want to Upgrade?

To: Gary105 who wrote (22065)	7/25/2011 10:29:16 PM
From: GROUND ZERO™	Read Replies (1) \| Respond to of 220478

Yes, you heard correctly... this is in addition to my buy and sell model which I post on this thread... I include some deep in the money calls, this gives me some downside protection... the calls expire the following month so they move quickly with the market so I'm not sitting with lots of premium during a big down swipe... For example: over the past 6 months I took in about 40% return, so now if the ETF declines 40% I'm still only even for the year, but a 40% decline would be mammoth... if I just take in about 8% a month writing at the money calls, it makes no difference what the ETF price is at the time, we're always looking at 96% annually... at this point the ETF would have to go to zero, I doubt that would happen... You have to use a market vehicle you feel comfortable with and one that pays well, although the more it pays the more volatile it is, which is why it pays more... GZ