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

To: chris714 who wrote (2013)

12/4/2018 11:13:23 AM

From: Thehammer

Read Replies (1) | Respond to of 2591

Hi Chris,

Thanks again for your comments. I added a few thoughts beneath each one.

I have become extremely comfortable with rolling....although often times it is because I have made an error in judgement to begin with....& other times the market just turns. It happens of course. If we look upon these as "lessons" and learn from them, then I wouldn't necessarily call them an error in judgement. The idea is to be right more often than not. Einstein said that one definition of insanity was doing the same thing over and over and expecting different results. We sometimes have to change tactics based on markets.

I wish that I could relate to your individual trades a little better. Due to the fact that I have to be willing to take assignment if necessary it sort of precludes me from selling Puts on stocks that trade over $100. All of these trades are in an IRA account and thus need to be cash covered. I do a few in my margin account but I think I explained how I lucked out of a potentially deep hole I dug.

Normally in stock trading larger numbers really shouldn't make a difference however in this instance where forced assignment can and will occur if you are an active Put seller I simply don't have the capital to deploy for instance if say I need to buy 10 contracts of LMT for example.
On the other hand and this is a generalization but I notice that your portfolio of stocks which basically all trade at 100+ per share are more conservative in nature and less likely to Bk than many of my sub$10 issues.I am not doing 10 contracts of LMT. I like to spread my capital around across sectors and I do allocate most of it to dividend growers. I am now looking at AMAT and it sells for $36 and change. Looks like greater than 15% annualized return but want to do more research on the stock. It has been on my "watch list" for a long time.

The turmoil of the last two months has put our trading and our positions to the test. I'm sure that both of us have plenty of Rolling opportunities coming in December.
It always feels nice when you come out whole eventually on the other side. Sometimes it takes a while.When I started to actively sell puts in 2011, I made a spreadsheet that tracked my exposure. At times, I'd say to myself, this option strategy was about the dumbest thing you ever did. However, I rolled and rolled and most of the positions turned around. Sometimes it was more sector based. I have already rolled most of my December positions except BA and LMT.

Thanks for showing your work. My pleasure. I certainly hope that it helps others and gets some conversation going.