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

To: Robohogs who wrote (5657)	1/27/2013 11:11:54 AM
From: Keith J	Respond to of 5891

Jon, I was real surprised the Republicans gave in to debt extension so quickly. Though it really seems like individual stocks and sectors are not all melting higher. AAPL is a condundrum; perhaps some money is flowing from it to other companies. I agree with you on the 1%+ return per month; in general trying to keep individual positions relatively small so if something does go wrong for a particular issue it doesn't impact portfolio too much. And I'm rolling positions pretty quickly when gains are substantial, instead of just waiting things out. Probably will look to sell a few UBNT Sept. puts this week. KJ

To: Robohogs who wrote (5657)	1/27/2013 1:24:12 PM
From: dealmakr	Read Replies (3) \| Respond to of 5891

Hi Jon, "It may sound weird, but even more than usual, I am sticking to my guns about getting at least 1% premium per month outstanding of the puts that I write." Is the 1% derived from total capital deployed if exercised or margin used or availability? Its fairly easy to get a 1% or better monthly return on maintenance margin capital used, but if things go bad, you have to be very proactive in monitoring the trade and be able to adjust it accordingly and always keep in the back of your mind the worst case possible true cost of the position if you have to come up with the dough. "That means generally that I am getting into only the riskiest situations, but at least you're getting paid for the risk in those situations. I am getting newsletters with 1% premiums for two months. Or even three months. If something goes wrong, there is no way to mitigate potential losses" It always comes down to the risk / reward profile on any trade. If you can tolerate the risks the rewards are bigger, but the opposite is true when things go the other way. Good Trading dealmakr