OK. I've posted a zipped version of "KCM Pro 2010.xls". It contains "My 2010 CC trades" as seen in this Yahoo! Group. It provides a means to graph the covered call investment progress.
Check it out. I will try and update it regularly. Feel free to download and add trades yourself. Volunteers are meant to use the spreadsheet to track 2010 progress (any still out there?). I also want someone to log next day open prices of all trades to see that timing is/isn't essential with my strategy.
Email me with questions using the spreadsheet or zip and send it to me and I can correct with fixes. It is fairly easy once you get practice and helps the newbie to learn covered call trading. Advance traders can also learn, since we typically beat the Nasdaq by 25% and avoid >20% losses in each year. It is a long-term growth strategy tested for over 10 years.
G
--- In ConservativeOptionS
>
> Thank you COS Group. I have names, messages and emails of 14 persons to help. Cool. We can now get started. Any "newbies" out there? We'd love to get your participation! Most all that responded were experienced (fresh blood lack pre-conceived notions). The rest may have to un-learn some bad trading habits;) but it's all good! I took a while to get all respondents, then when I had things written up earlier today - someone tripped the circuit-breaker (had to re-write this)!
>
> Of those interested, I'd like (3) good with prose. I like IBD's take on the markets. I'll need a re-write of a (portion) of The Big Picture for the market analysis portion of my Weekly e-Newsletter. I can email the cutout portion to be re-written, then edit the important (bold, italics, etc.) parts when I get it back from you. This shouldn't take too much of your time, but helps me tremendously since it needs to be done every week.
>
> Additional help is needed with collecting stock & option data for my weekly watchlist of Covered Call Candidates. I have (6) spreadsheets each with 50 companies that are tracked for their current option premiums. I'll simply email (2) sheets amongst (3) volunteers. They will need to bring up Yahoo! option quotes after the market close Friday, drag their mouse over the selected data and paste it into the spreadsheet. Then send this ASAP before Saturday noon ET for me to further process for technicals, fundamentals, industry, earnings date and rank. Done weekly so let me know if you'd like to help with this.
>
> Once we lay this groundwork, while I set up the new group, we'll then get into two seminar series' I've written around the turn of the last bull market. One is simple that details just what you need to know to grow your account at a really good average rate! The last decade was 50%/yr with a 20% (max) drawdown. Each year varies, but out-performs the Nasdaq by 25%+. Of course, a whole year - trading through all market periods (flat, up-, and down-trends) - is required to learn this entire approach for yourself...but following each trade by hand along with patience will get you there.
>
> REMEMBER KEY: limiting losses during less-optimal (down-trends) using my proven stop methods, will retain the majority of sharp and sudden gains we get off each correction bottom/new rally.. I do NOT hold onto losers nor continue to write options against stocks that drop. Ignoring these strict stop methods can erase years of solid gains, so the simple method will become your routine. We'll make your $$$ work hardest for you, so get ready for the New Year.
>
> The other seminar series' is spreadsheet instruction for everyone interested in taking each trade and following along. Simply enter the stock and option prices captured (exact timing not required) and learn the Excel commands to graph your progress. We'll keep a master link at the Group site, but persons can zip and email this to me or volunteers for error correction until you are up to speed. I still use these so I can visually see and make sure that I am on track with my past and versus the indexes. Also I can at a glance see my asset allocation, cash balance, margin, amount ITM, etc. More on this later.
>
> Paper trading is encouraged and WORKS JUST AS WELL to get you up and running with the strategy. After all it is the learning of the covered call principles and methods I know work for yourself to take with you for life that matters. Then you can manage your account with great success on your own. Our #1 goal are to achieve multi-year RESULTS to get compounding to work for us in a most powerful way. It is the day-to-day routine that I've simplified for you to learn. Some may test for me logging in the next day open price for all trades to see that/if end-of-year graphs are mirror results (should be close). This just to show that your time and effort to get my result can be looked at as minimal.
>
> Of course, I will be able to answer all questions along the way. I look forward to hearing your response(s).
>
> Gilbert
>
>
>
>
> ____________
> From: Gilbert <gilbert_arevalo@
> To: ConservativeOptionS
> Sent: Sat, December 12, 2009 8:15:54 AM
> Subject: [ConservativeOption
>
>
> Thank you, those that emailed and replied to the thread. There is some interest and I'm really certain with gains from high-growth CC plays with a turn off the next correction bottom - interest will skyrocket!
>
> I started real-money covered call trading with $20k in an IRA account in Jan 2002. My stop methods allowed for a prolonged downturn [w/ a few *failed* (head-fake) market "bottom" attempts] to not hurt or drawdown my account TOO much (<20%) - before rallying in Q4 into the year-end to close out with a 0% annual gain.
>
> But in 2003, on March 17th I began selling covered calls again and VIOLA - big Nasdaq gains (70%) allowed for even bigger (120%) annual CC gains. The Covered Call Investment Training services I was offering got a HUGE response, since many jumped on board knowing/seeing big gains on the table for this strategy approach.
>
> I see this happening in the near future, hopefully. So now is a good time and I put this "proposal" together before these last recent posts with more detail. Please review and we can get started ASAP. I appreciate those offering help to make things run best.
>
> =====
> I'm just going to throw this out there and see what (if any) response I get back. If the past is any indication of the future - we are very nearly in for some ramped up gains using my covered call system.
>
> I would like to start a new group. I've been trading covered calls for over 10 years. My training methods may not work for everyone, but I am willing to give it a try here.. I took a couple of years off from involving myself much with training students to develop my other trading strategies.
>
> I'm going to try something new in 2010. I have a results-driven covered call website. Key design metrics (imho) to an investment strategy are (1) long-term prospects (2) calmar ratio* (3) scaleability (4) time involvement (5) automation quantity.
>
> Ideally system rules are set across all time-frames and work to produce a good-to-high annual return and refuses to break or drawdown much under worst-case circumstances. If the majority of trading signals/research routines/market analysis can be automated the better.
>
> All of this is already complete or accomplished. Gains are exponential. The value during "training" of students, however is often over-looked or missed. It takes about ONE YEAR to experience all market scenarios that may include high returns during optimal periods and little growth when conserving equity during difficult (less-optimal) market climates.
>
> Truth be told, all situations need to be experienced or navigated to completely learn a true winning trading strategy successfully. Hitting metrics during all of these periods is all good (even when gains aren't being made). A true long-term (multi-year) successful approach will have high gain periods and drawdowns. It is just part of the game.
>
> But to truly understand and "get" this great value (see compounding annual returns chart) about one year needs to be sacrificed. In closing, the trading strategy has been designed and kept entirely simple - it is also proven - so the routine will not require much day-to-day time. It just requires that you trade across all types of markets: uptrends and downtrends and flat.
>
> I would like to also get some help with the weekly routine. Stock and option data need to be entered into a spreadsheet (copy and paste) for me to process the weekly watchlist. Charting spreadsheets will need to be routinely updated to track progress. I would also like to get help with the weekly market analysis. Basically I need a rewrite of 5 snapshots provided for the week to be put in my weekly newsletter.
>
> Basically just make every (market orders - about 15 per month) trade both in and out of all stock and option positions, within a reasonably time. We basically compare the covered call return on a trailing 12-month chart versus the Nasdaq to see that current progress is in keeping with past (25%+ outperformance versus the Nasdaq).
>
> *CAGR/DD (compounded annual growth rate/(max drawdown): ~2.5 (50%/20%)
>
> I've done some market shift calls and trades in the last two years in forums - but would now like to get a more detailed discussion amongst interested covered call investors. Perhaps taking 5 people that can compare results. Can be paper-traded as my graphing spreadsheet allows. It would also be good to compare those that take trades exactly when they happen versus those that get around to it perhaps hours later or even at the open the next day and compare this. Annual charts are supposed to be nearly exact, TBD.
>
> I do not think that one year is too much to learn a valuable lesson for life. After all, if one actually learns how to get these same results their long-term return can't be beaten by anyone. I think this will be fun for everyone. Any questions?
>
> this from John Hudgens may probably much help:
>
> While I do not want to be in the group, you might consider setting up a paper account at Opions House. They love virtual accounts, as a way to bring in new blood. If you have single account, you could cheat the password, give it to everyone and then everyone could see what happens.
>
> regards, G
>
> --- In ConservativeOptionS trategies@ yahoogroups. com, "Gilbert" <gilbert_arevalo@ ...> wrote:
> >
> > I should also add that my step-by-step covered call training program will be free for volunteers, while their time will be minimal. Newbies that will paper-trade are the best candidates.
> >
> > Please submit your qualifications and/or interest. Amongst the 5 I hope to get someone with a bit of writing skills, while others can keep an Excel spreadsheet updated (or can learn this).
> >
> > I got good proven results for 11 years (~50% CAGR). From 2007-2009 I returned 17%, while the market lost 28%. We'll just take every posted trade (about 15 per month) and map out the return versus the market (Nasdaq).. CC gains should exceed this by about 25%+ in 12 months.
> >
> > After one year of complete - given the individuals stick to the plan - training can be used (beating most) for life. If I get a good initial response, I can then post more of the details.
> >
> > G
> >
> > --- In ConservativeOptionS trategies@ yahoogroups. com, "Gilbert" <gilbert_arevalo@ > wrote:
> > >
> > > Hello Group:
> > >
> > > I'm thinking of starting a new covered call investment strategy group. Although I've kept up my trades these last couple of years, I haven't been that involved with covered call training.
> > >
> > > I got good proven results. I think it would be beneficial to take 5 volunteers for one year to discuss trades. Not sure if many here would be interested. These are my (system design) keys:
> > >
> > > (1) long-term prospects (2) calmar ratio* (3) scalability (4) time involvement (5) automation quantity.
> > >
> > > *CAGR/DD (compounded annual growth rate/(max drawdown): ~2.5 (50%/20%) Please note that this is a MULTI-YEAR average that depends on the Nasdaq composite's annual return. But system approximates a 40% annual out-performance for over 10 years.
> > >
> > > G
> > >
> > > --- In ConservativeOptionS trategies@ yahoogroups. com, Gilbert Arevalo <gilbert_arevalo@ > wrote:
> > > >
> > > > One way to look look at my high-growth covered call investment strategy - is that I only take what the market gives.
> > > >
> > > > When I get a LONG call signaling the market uptrend may once again resume - I test the waters, with a CC play. If after a spell or a few days this does well or otherwise moves ITM (remember these are written against leading growth stocks) I'll then enter a second CC position. As we move toward expiration - with a successful rally call - I can get fully vested and capitalize strongly with CC premiums and perhaps some stock appreciation.
> > > >
> > > > I do this as often as the market allows in each and every year, with good results. As we head into the new emerging bull market, I fairly certain my CC growth approach will gain serious traction.
> > > >
> > > > Otherwise I am out. If I get consecutively stopped out of my CC positions, most often the rally is killed dead and we enter a correction. Apparently this system doesn't ALWAYS work as the last 4 months dictate, but I am only concerned that it *works* during the majority of market cycles.
> > > >
> > > > If the position stop is stock-specific I take a relatively small loss and move on to the next. Eventually I am fully vested. Again, (overtly-scrutinize d) stock selection I have factored out of my strategy
> > > >
> > > > Getting stopped and containing losses is not a bad thing. It has saved me time and again. Also, ALWAYS the market contracts allowing for successful re-entries from cash to out-gain the indexes further. I guess I have to live with temporary (and sometimes prolonged) periods of lackluster performance and at (rare) times perhaps under-performance.
> > > >
> > > > However, things always do average out fine in the long run.
> > > >
> > > > G
> > > >
> > > >
> > > >
> > > >
> > > > ____________ _________ _________ __
> > > > From: Ali Pashaei <ali.option. investor@ >
> > > > To: ConservativeOptionS trategies@ yahoogroups. com
> > > > Sent: Mon, December 7, 2009 10:03:43 AM
> > > > Subject: Re: [ConservativeOption Strategies] Re: Long-Term Growth Strategy
> > > >
> > > >
> > > > Gilbert Says:
> > > > >>I can't really significantly change my strategy. After all it has continued to work for over a decade.
> > > >
> > > > I agree with you 100%. You have a strategy that has worked for you over the years under different market conditions. It is wise not to change it significantly - as you've said. Once again, thanks for sharing it & I hope you continue to due so. It's also best to keep things as simple as possible, which I believe you are doing.
> > > >
> > > > The only two areas that I would continue to research are your stop-loss level selection to see if there are methods that would reduce whipsaws. And also a plan for dealing with sudden and massive gaps due to a surprise news where the stock might lose 30+% of it's value over night such that stops would not help.
> > > >
> > > > I like what Dr. Alexander Elder says & I'm paraphrasing: "Good money management is not as important for bad traders as it is for good traders since bad traders are not going to be around long enough to see the unexpected moves. But if you're a good trader, you need exceptionally good money management, since you're more likely to see a large unexpected move against your position. The longer you're in the game, the more likely you'll experience one."
> > > >
> > > > He manages that risk by mainly going long low price stocks - there is the natural floor of zero. I manage it by having protective puts (even if they're way OTM) against all my positions. I think of it as insurance. I'm willing to pay for health, car, home insurance - so why not stock insurance - which has a higher probably of crashing.
> > > >
> > > >
> > > > - Ali
> > > >
> > > >
> > > > On Sun, Dec 6, 2009 at 10:12 AM, Gilbert <gilbert_arevalo@ rocketmail. com> wrote:
> > > >
> > > > >
> > > > >
> > > > >
> > > > >
> > > > >
> > > > >
> > > > >
> > > > >
> > > > >
> > > > >
> > > > >
> > > > >
> > > > >
> > > > > >
> > > > >
> > > > >>
> > > > >
> > > > >>
> > > > >
> > > > >I can't really significantly change my strategy.. After all it has continued to work for over a decade.
> > > > >
> > > > >>My recent trades - since mid-AUG - have told me just what they have have always been telling me. The market is too risky to be that exposed into the types of CC's I manage. The excess risk (volatility) WILL eventually be wrung out to make my CC trading environment less risky (= more gains).
> > > > >
> > > > >>That is ok for a "season". It is just odd to see the market move significantly higher during this period and yes this has irked me. At least in 2007, when I basically tracked the Nasdaq, I kept pace - knowing a market turn would come and I could then out-gain the composite further.
> > > > >
> > > > >>With the turn of the new year in 2008 - the market dropped, I went to cash and into my "wait-and-see" mode until the market put in a bottom. The ensuing rally period allowed for my system to then vault 20% in about 2 months. That - plus avoiding the loss from the nearly 20% drop again set my near-term (one-and-a-half year) growth and out-performance back into my standard range.
> > > > >
> > > > >>Furthermore, gains were held in late-2008 (see link in original post or http://tinyurl. com/y8q3fep) .
> > > > >
> > > > >>Yes, I could incorporate an adjusted version to my trading system, when I see an environment like this, but a huge 70% outperformance in '08 is probably just coming back to norm. I know this conservative forum is probably not the right venue to discuss my high-octane system, but this approach to CC writing has not (yet) adjusted to shoot for lesser gains.
> > > > >
> > > > >>Just going to wait this one out - not that I don't keep learning (my notes): Key lessons investors should learn from 2009? First, I would say that in a tough market like this, you realize how crucial good stock-picking really is. CC's under-performed (while select top stock buys probably did better). Entries were not scrutinized enough. Nothing has changed. Lesson learned.
> > > > >
> > > > >>G
> > > > >
> > > > >>--- In ConservativeOptionS trategies@ yahoogroups. com, John Hudgens <jdhudgens2000@ ....> wrote:
> > > > >>>
> > > > >>>
> > > > >>> Gilbert, This may sound cruel
> > > > >>> Â
> > > > >>> You need to reassess how you are investing. If you didn't make money this year, your strategy is wrong. You have a good strategy for low IV stocks and a poor strategy for high IV stocks.  ASIA dec 25 has an IV of 54 compared to an IV 15.5. So you would expect
> > > > >>
> > > > >> ASIA to trade between 12.5 and 37.5 67.5% of the time in the future. It has been remarkedly well behaved recently.Â
> > > > >>> Â
> > > > >>> Consider the ASIA chart, with a ten day moving average added. (appended below) Stock valuation is generally treated as a random walk and as such generally is disributed in a gaussian fashion around a mean. In this case, we will be using the 10 day average. Between now and expiration, you should agree that the stock is likely to move as much as it as recently relative to that average, I hope. That movement looks like $3-5, not $2.15. You had a logic for you stop, but the logic was wrong for the situation.  The minute you set your stop at less than the likely movement of the stock, You said: I am going to be stopped out! Your stop was pragmatic, but not rational.
> > > > >>
> > > > >>
> > > > >>> Â
> > > > >>> Â
> > > > >>> Â
> > > > >>> Â
> > > > >>> I know mine is wrong for a down market (don't know yet how to adapt) and I am probably ok for sideways.
> > > > >>> Â
> > > > >>> Â
> > > > >>> This is not a brag, but this is my first options year and I am averaging multiple% per month with one down month while I couldn't be on the internet (stuck in Alaska). I am sure I am trading more than you. I do not use hard stops, but I am now very picky about what I trade. I spend at least 10-12 hours a week researching and reviewing to make sure that I am under control.  I am learning about MACD and SL signals, Slow stocastic signals, Bollinger Band, Candle sticks etc. I watch tapes of option strategies. I look at Web sites (Seeking Alpha, ONN.tv, and others) for ideas. I do get IBD weekend.  I use the free webinars at Schwab, Options House, OptionsMonster. I even subscribe to Market watch options because it is inexpensive and I think  Larry McMillen is one of the smartest options guys out there. I learned early on that every whim trade has
> bit me in the rear. I learned my lesson with naked puts,
> > > > straddles,strangles ,
> > > > >>
> > > > >> etc. I watched STEC gap down from 40 to 25 overnite. I fiigured out as did Dr Joe that writing against Leaps was way better than stocks, but he and I disagree about 2 year leaps and how to handle 1 year leaps when the stock appreciates, but there are 2 sides to every coin.
> > > > >>
> > > > >> Â
> > > > >>> I do have fun money that I play iron condors: but we all have to have a divertisement. There are 2 types: low reward, low risk, and high reward, high risk-- I do both.
> > > > >>> Â
> > > > >
> > > > >>> I can tell people pros and cons of many option services, but that is not the scope of this blog
> > > > >
> > > > >> --- On Fri, 12/4/09, Gilbert <gilbert_arevalo@ ...> wrote:
> > > > >>>
> > > > >>>
> > > > >>> From: Gilbert <gilbert_arevalo@ ...>
> > > > >
> > > > >>> Subject: [ConservativeOption Strategies] Re: Long-Term Growth Strategy
> > > > >>> To: ConservativeOptionS trategies@ yahoogroups. com
> > > > >>> Date: Friday, December 4, 2009, 11:05 AM
> > > > >>>
> > > > >>>
> > > > >
> > > > >> Â
> > > > >
> > > > >>>
> > > > >>>
> > > > >>>
> > > > >>> I'll also add that almost always, when I can't stay into my CC positions - the market is best handled with caution (minimal exposure). Sad thing, the market kept rallying after stopping me out these last 4 months!
> > > > >>
> > > > >>
> > > > >>> It makes me at least attempt to get vested, but it has been a slow (8%) bleed from my account. I keep saying the marekt will eventually *have* to correct, but after 3-4 rounds of this - I'm quite sick.
> > > > >>>
> > > > >>> Glad to know that long-term prospects are still in order. But just like to get through to it. Like in 2007 with the market seeing a few 15-20% swings - was VERY difficult to gain any traction. But finally in late-2008 everything greatly came back into shape. I outperformed the market by 70%!
> > > > >>
> > > > >>
> > > > >>> But it looks like now I had to then give some of this back. Reverting to the mean - or a more orderly market will be nice again.
> > > > >>>
> > > > >>> G
> > > > >>>
> > > > >>> --- In ConservativeOptionS trategies@ yahoogroups. com, John Hudgens <jdhudgens2000@ ...> wrote:
> > > > >>> >
> > > > >
> > > > >> > What you got caught in was a blip in a stock with high IV -- if you want tight stop losses, you cannotÃÆ'‚ do cc onÃÆ'‚ stocks with high IV
> > > > >>> >
> > > > >>> > Go toÃÆ'‚ Yahoo,ÃÆ'‚ pull up ASIA, go to basic tech Analysis click on the 10 and 20 day and bollinger bands.ÃÆ'‚ click on 3 month ÃÆ'‚ Your stockÃÆ'‚ has been ÃÆ'‚ bouncing arround the 10 day and off and below the 20 day average.ÃÆ'‚ Your stop and the 20 day average had to intersect.ÃÆ'‚ Your only hope was that the collisions would occur after expiration..
> > > > >>
> > > > >> > ÃÆ'‚
> > > > >>> > If you want to do a little more tech analysis, add macd and slow stocastic to the mix.ÃÆ'‚ Right about the time you bought, the Signal line started going abouve MACD-- indicative not going up and the Stoch D went avoveÃÆ'‚ the Stoch KÃÆ'‚ ÃÆ'‚ also not up -- so you had 2 downward pointers just after you bought.ÃÆ'‚ Understanding all this is way beyond an email, but depending on your broker, you should be able to find more information.ÃÆ'‚ But simplisticly the crossing of the MACD envelope and the signal are generally interpreted as either buy or sell signals.
> > > > >>
> > > > >> > ÃÆ'‚
> > > > >>> > If you like the stock, this why I say buy a married put.ÃÆ'‚ You could buy a June 22.5ÃÆ'‚ put for $3.60.ÃÆ'‚ Assume the stock stays at $25.ÃÆ'‚ Write $25 calls d, j, f, m, a, m,ÃÆ'‚ for $2.50 andÃÆ'‚ then sell the june put for $3.ÃÆ'‚ Note, today, the dec 22.5 dec put is going for $3 --why,ÃÆ'‚ cuz it has $2.50 of intrisic value and $0.50 extrinsic value. So the insurance really only costs $0.60 cents or a dime a month!ÃÆ'‚ I think that may be less than you lost!ÃÆ'‚ And had you not been stopped out, you would now be ok!
> > > > >>
> > > > >> > ÃÆ'‚
> > > > >>> > ÃÆ'‚
> > > > >
> > > > >>> > --- On Thu, 12/3/09, HankF <hanksterr@ ..> wrote:
> > > > >>> >
> > > > >>> >
> > > > >>> > From: HankF <hanksterr@ ...>
> > > > >>> > Subject: [ConservativeOption Strategies] Re: Long-Term Growth Strategy
> > > > >>> > To: ConservativeOptionS trategies@ yahoogroups. com
> > > > >>> > Date: Thursday, December 3, 2009, 3:06 PM
> > > > >>> >
> > > > >>> >
> > > > >
> > > > >> > ÃÆ'‚
> > > > >
> > > > >>> >
> > > > >>> >
> > > > >>> >
> > > > >>> > Thanks.
> > > > >>> > I Appreciate the clarity.
> > > > >>> > Hank
> > > > >>> >
> > > > >>> > --- In ConservativeOptionS trategies@ yahoogroups. com, "Gilbert" <gilbert_arevalo@ ...> wrote:
> > > > >>> > >
> > > > >>> > > Sure. Here is a recent position opened that subsequently triggered my "Stop-Loss" target:
> > > > >>> > >
> > > > >>> > > Monday, November 16, 2009
> > > > >>> > >
> > > > >>> > > Bought 100 shares of ASIA (AsiaInfo Holdings, Inc..) at $25.64 (ask).
> > > > >>> > >
> > > > >>> > > Sold (1) ASIA Dec 25 (EUJLE) call option contract at $2.10 (bid).
> > > > >>> > >
> > > > >>> > > Stop Loss: $23.54
> > > > >>> > > - -
> > > > >>> > > Friday, November 27, 2009
> > > > >>> > >
> > > > >>> > > 9:34 am EST
> > > > >>> > >
> > > > >>> > > Bought (1) ASIA Dec 25 (EUJLE) call option contract at $1.15 (ask).
> > > > >>> > >
> > > > >>> > > Sold 100 shares of ASIA (AsiaInfo Holdings, Inc.) at $23.54 (bid).
> > > > >>> > >
> > > > >>> > > Annoyingly I took a loss - only to see the stock move back up! But better safe than sorry..
> > > > >>> > >
> > > > >>> > > G
> > > > >>> > >
> > > > >>> > > --- In ConservativeOptionS trategies@ yahoogroups. com, "HankF" <hanksterr@> wrote:
> > > > >>> > > >
> > > > >>> > > > Gilbert,
> > > > >>> > > > Terminology again.
> > > > >>> > > > What do you mean "stopped"?
> > > > >>> > > > Do you mean your short calls get stopped out or the stock?
> > > > >>> > > > Examples are always better than just words.
> > > > >>> > > > Thanks.
> > > > >>> > > >
> > > > >>> > > >
> > > > >>> > > > --- In ConservativeOptionS trategies@ yahoogroups. com, "Gilbert" <gilbert_arevalo@ > wrote:
> > > > >>> > > > >
> > > > >>> > > > > Sure: Stock Purchase Price - Option Sell Price = Stop Loss Target
> > > > >>> > > > >
> > > > >>> > > > > For over ten years and through two horrific bear markets these have been a boon to my strategy. Since I sell covered calls against leading growth stocks in an uptrend. . .when these begin to get stopped - one after the other - most always this is a pre-cursor to a significant market decline.
> > > > >>
> > > > >> > > > >
> > > > >>> > > > > Once a new rally is successful "confirmed" (per IBD rules), I am back in selling like mad, month after month, until the cycle starts all over again. Works like a charm - and in fact out-performs even IBD's CAN SLIM #1 Investment Strategy as independently audited by AAII.
> > > > >>
> > > > >> > > > >
> > > > >>> > > > > G
> > > > >>> > > > >
> > > > >>> > > > >
> > > > >>> > > > > --- In ConservativeOptionS trategies@ yahoogroups. com, "Bob Hug" <rchug@> wrote:
> > > > >>> > > > > >
> > > > >>> > > > > > Hi, Gilbert:
> > > > >>> > > > > > What are your stop methods? Thanks!
> > > > >>> > > > > > Bob
> > > > >>> > > > > >
> > > > >>> > > > > > ----- Original Message -----
> > > > >>> > > > > > From: Gilbert
> > > > >>> > > > > > To: ConservativeOptionS trategies@ yahoogroups. com
> > > > >>> > > > > > Sent: Tuesday, December 01, 2009 9:02 AM
> > > > >>> > > > > > Subject: [ConservativeOption Strategies] Long-Term Growth Strategy
> > > > >>> > > > > >
> > > > >>> > > > > >
> > > > >>> > > > > >
> > > > >>> > > > > > Hi. I am new to the board with a recent reply:
> > > > >>> > > > > >
> > > > >>> > > > > > Re: Let's Get the Site Active Again !!
> > > > >>> > > > > >
> > > > >>> > > > > > My covered call strategy is no doubt a lot simpler than most. many a "mantra" I
> > > > >>> > > > > > take from IBD like: "The safest place to be during a market downtrend is in
> > > > >>> > > > > > cash."
> > > > >>> > > > > >
> > > > >>> > > > > > My stop methods got me cashed out before the big 21-day drop
> > > > >>> > > > > > (http://tinyurl. com/y8q3fep) and back in on the 12-Mar-2009.
> > > > >>> > > > > >
> > > > >>> > > > > > G
> > > > >>> > > > > >
> > > > >>> > > > > > I see the board hasn't been active much until recently. It has been an interesting couple of years for my covered call system - perhaps that played some part in this.
> > > > >>> > > > > >
> > > > >>> > > > > > IMHO I think the current market rally has nearly run it's course and that when (not if) we get a market correction (>10% decline) a lot of the remaining excess (market volatility) will be removed - to once again make a prime environment for my CC strategy.
> > > > >>
> > > > >> > > > > >
> > > > >>> > > > > > I can share a lot and will make an attempt to update regularly so let's start by saying in this forum I will speak mostly on what I know best regarding option strategies: covered calls.
> > > > >>
> > > > >> > > > > >
> > > > >>> > > > > > I've been very focussed in this area of trading for over 10 years - and I've seen almost every kind of market environment. How does it apply to my long-term approach?
> > > > >>> > > > > >
> > > > >>> > > > > > I sell covered calls against underlying market-leading growth stocks during flat-uptrending market periods. IBD helps me with indicating
> > > > >>> > > > > > "tops" and "bottoms". I cash out during market corrections and bear markets.
> > > > >>> > > > > >
> > > > >>> > > > > > This system has worked quite well for over a decade. If any are interested I can share some of this with you. Key to my high-growth strategy are maximizing the effect of "compounding" monthly returns - while keeping tight rein on losses in the event of a downturn.
> > > > >>
> > > > >> > > > > >
> > > > >>> > > > > > My stop methods have proven to be integral in the success of this strategy. My CAGR or compound annual growth rate is superb and max drawdown well-contained - all key to a true long-term winning strategy.
> > > > >>
> > > > >> > > > > >
> > > > >>> > > > > > My stance right now is "Caution" and I have pared back to limited exposure - taking my cue from institutions on whether or not the stocks will move higher or fall off and correct.
> > > > >>
> > > > >> > > > > >
> > > > >>> > > > > > I can be quite nimble and patient - but I do not hold onto losing positions. When the trend is our friend - vehement gains can be made in a fairly safe and conservative manner. . .but I cash out (stop=stock purchase price minus option premium) during uncertainty.
> > > > >>
> > > > >> > > > > >
> > > > >>> > > > > > Fortunately, phasing in and out of market trends has been consistently profitable. Ramped up gains over the years have for the most part been retained using my stop methods.
> > > > >>> > > > > >
> > > > >>> > > > > > I have had to be cautious these last few months - while the market run continued. Perhaps in the near future we'll see the next sudden decline and a subsequent move off the bottom making my strategy less risky to get fully invested again in covered call positions.
> > > > >>
> > > > >> > > > > >
> > > > >>> > > > > > I would like to share this with those interested, since I've monitored most all cc strategies and find my result to be tops. Many may have been exposed along with the added risk this past half-year to gain more in 2009 (while I simply made sure past compounded returns are retained), but with my system you have to take in many or all market years.
> > > > >>
> > > > >> > > > > >
> > > > >>> > > > > > Getting risky in one year for a temporary jump in gains may very well work against you bringing sudden severe drawdown and steep account loss, rendering years of system gains worthless. If one is patient, no gains for a while will bring much gains and/or outperformance as I've seen time and again.
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> > > > >> > > > > >
> > > > >>> > > > > > Like I say with investing using covered calls or most anything -- a steady high-growth compounded average managed for YEARS is the surest way to long-term prosperity and great wealth.
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> > > > >>> > > > > > G
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