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Strategies & Market Trends : How To Write Covered Calls - An Ongoing Real Case Study! -- Ignore unavailable to you. Want to Upgrade?

To: ed c. who wrote (9273)	12/18/1998 1:12:00 AM
From: jebj	Respond to of 14162

. I'm probably going to confuse the hell out of a lot of people but here goes anyway. - ed Yup - you did! But thanks for the try. :) jb

To: ed c. who wrote (9273)	12/18/1998 9:34:00 PM
From: Vol	Respond to of 14162

Ed, i'm a bit confused, but let's iron it out. <<1. I wait for the VIX to get pumped up, then I'll buy a ratio spread (usually 1 by 2) as wide as I can get it. I try to get it for even money or a slight debit. For example, I bought 1 1170 Jan S&P 500 future put for every 2 Jan 1110 puts I sold. That trade alone, if done for even money, has no upside risk, but will make a bundle if the market goes south. >> Please explain the working of futures to us. If you sold puts at a higher strike and bought puts at a lower price, isn't this a bull put spread? In other words, don't you want the market to go up? <<But be ready to adjust and allow for plenty of excess margin because you may need it. >> How is margin calculated for futures? <<At the same time, I'll sell slightly out of the money puts for a credit. Know I'm sitting pretty. I can profit in any direction. If the market starts tanking, I'll roll the puts to a lower strike and probably martingale them (that is sell twice as many as originally) to continue with a credit. >> Follow you here. "Rolling for credits" <<And at the same time, I'm constantly on the lookout for buying deeply out of the money vertical debit spreads as cheap as I can get them to help with margin and prevent major losses if the market goes in free fall.>> I assume you mean a put bear spread? In other words, buy a put and sell a lower strike put.