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

To: Bridge Player who wrote (5781)	8/29/2013 8:22:51 PM
From: Keith J	Respond to of 5891

Have not, though considering in the future but only likely to employ prior to earnings releases. KJ

To: Bridge Player who wrote (5781)	8/30/2013 12:11:12 AM
From: Robohogs	Read Replies (1) \| Respond to of 5891

I do mainly use strangles probably half to 2/3. I can also honestly admit to trying to leg in but usually bungle the calls and start late. In this mkt, may help protect mistakes as I don't see runaway to upside whereas a cascade down might happen. You have to be willing to take the loss though as while margin is good at beginning, stocks gapping higher GULP margin - higher price to take percentage of, less cushion if any, etc. Takeovers kill. I had 2 nearly 6 figure red days in February as a result - on a takeover, on a heavy short where I shoulda been out with ginormous gains - thesis fell apart, and hedges on a DOJ antitrust situation. I have spent almost the whole year digging out. You also have to deal emotionally with losing money while being right on favorite stocks - have had happen 3-4x lately. BUT you remember those losses more than the steadier gains as a result. Overall it helps gains. But again, don't count the money. I would assume that you might make 1/3 to 1/2 the pool of premiums in a GOOD flattish mkt. some guys here seem to print money every tkt; many of mine become fights. GDP is a good example - liked the level, the vols, etc. Sold a ton of puts. Sold some calls too. And as it got going rolled out and up over and over. Now stuck with a big mess. And if you try to delta hedge you end up buying high and selling low. Just some food for thought. Jon