Yes Bob. Tight stops let you invest another day. But, growth or "momo" stocks are also the first to participate on the downside. Even still, with a $20,000 account - you will see $10 - $30 100 share CC positions will do fine.
This type of action is actually a real good "indicator" that some correcting in the market is about to unfold. I can't remember the times I've been stopped out of my positions, only to see the market drop 10%+.
Like I said, with an uptrend and excellent stock selections - even with high-beta - it gets fairly "mechanical" for me to see positions participate in a healthy way to the upside.
Notwithstanding all the fluctuations we've seen in the Nasdaq since July '09 - whereby my getting stopped consistently was met with sudden low-volume GAINS in these very same stocks and the market!
But, I am a very disciplined trader and have to go with the percentages. This CC strategy has work well for me during the majority of "multi-year" periods and I expect (hope) the 2010 market to behave (more) "rationally"
After seeing my risks - as outlined in performance charts and MAX drawdown -I really do not see why larger accounts need to be more diversified, do you?
G
--- In ConservativeOptionS
>
> Hi Gilbert - You do set very tight stop losses if I remember correctly. So maybe that helps offset the fact that you allocate more of your capital per trade than some others do? - Bob C.
>
>
>
>
> ____________
> From: Gilbert Arevalo <gilbert_arevalo@
> To: ConservativeOptionS
> Sent: Tue, March 23, 2010 10:49:36 AM
> Subject: Re: [ConservativeOption
>
> Â
> Ed,
>
> Perhaps I wasn't clear. 3 of 4 growth stocks follow the trend and 33% allocation into one CC position is suicide. I have found that 15-20% works fine for a $20,000 account and even larger accounts. During tumultuous times such as '08, I did lessen to ~8-15%. With proper screening and avoidance of biotech - I sleep well and do not montior positions all day long.
>
> Here is something I dug up:
>
>
>
>
>
> Keep in mind that I do NOT hold positions that tank below my stop-point. Every correction since 1998 I have gone to cash, waiting for the market to put in a "bottom". Works fine for me - although the current environment I find is most trying. In the future, I will loosen my stop (a bit) more with heightened volatile periods. Still my (max) drawdown should be contained to within 20%. Drawdown is one measure I use to assess my risks that I find to be entirely appropriate.
>
> G
>
>
> ____________
> From: Edward Boot <e.boot@...>
> To: ConservativeOptionS trategies@ yahoogroups. com
> Sent: Mon, March 22, 2010 1:26:26 PM
> Subject: RE: [ConservativeOption Strategies] Re: My 2010 CC Trades
>
> Â
> G,
> Â
> I agree that the trend is your friend, and as such diversification works best. If you limit yourself to only 3-4 growth stocks, and one you select was hit for good reason (look at SPWRA last Thursday â€" then you take a disproportionate hit and lose most of your gain. I try to limit myself to 8% of capital in any one stock. If you put 33% of your capital in 3 stocks and one slips you lose the profit from a second 33% to just get even. It amy be a little more effort to find 10-12 stocks you like, but it offers a lot more protection.
> Â
> Ed Â
> Â
>
> ____________
>
> From:ConservativeOp
> Sent: Monday, March 22, 2010 8:52 AM
> To: ConservativeOptionS trategies@ yahoogroups. com
> Subject: [ConservativeOption Strategies] Re: My 2010 CC Trades
> Â
> Â
> gil i have to say that much invested in trading capital per position is imo and most traders toooooooooo large......and true the trend is your friend and your friend and turn and bite you in you ask way before you know it even happened...drjoe
>
> --- In ConservativeOptionS trategies@ yahoogroups. com, Gilbert Arevalo <gilbert_arevalo@ ...> wrote:
> >
> > Hi Fred,
> >
> > 15-20% usually works just fine. In the last two years I have gone less to diversify more with all the volatility. But with the trend as your friend, 3 of 4 growth stocks (when selected well) should participate. If one does not, I'll take a small loss and get into another stocks' juicy premium.
> >
> > G
> >
> >
> >
> >
> > ____________ _________ _________ __
> > From: fred barbour <barbour2p@ ..>
> > To: ConservativeOptionS trategies@ yahoogroups. com
> > Sent: Thu, March 18, 2010 8:50:29 PM
> > Subject: Re: [ConservativeOption Strategies] Re: My 2010 CC Trades
> >
> >
> > Gilbert,
> >
> > Curious as to what % of total trading cash you commit to each new position?
> >
> > Fred
> >
> > --- On Thu, 3/18/10, Gilbert <gilbert_arevalo@ rocketmail. com> wrote:
> >
> >
> > >From: Gilbert <gilbert_arevalo@ rocketmail. com>
> > >Subject: [ConservativeOption Strategies] Re: My 2010 CC Trades
> > >To: ConservativeOptionS trategies@ yahoogroups. com
> > >Date: Thursday, March 18, 2010, 11:31 AM
> > >
> > >
> > >
> > >As the market continues to prove it's mettle to rally (and with NUS hanging in there) - along with BCSI slated to be exercised after the close tomorrow, we'll increase our CC portfolio exposure.
> > >
> > >Thursday, March 18, 2010
> > >
> > >12:15 pm EST
> > >
> > >Bought 100 shares of VLTR (Volterra Semiconductor Corporation) at $24.87 (ask).
> > >
> > >Sold (1) VLTR Apr 25 (QYU1017D25) call option contract at $1.00 (bid).
> > >
> > >Stop Loss: $23.87
> > >
> > >G
> > >
> > >--- In ConservativeOptionS trategies@ yahoogroups. com, "Gilbert" <gilbert_arevalo@ ...> wrote:
> > >>
> > >> Monday, March 15, 2010
> > >> 12:19 pm EST
> > >>
> > >> Bought 100 shares of TRLG (True Religion Apparel, Inc.) at $29.41 (ask).
> > >>
> > >> Sold (1) TRLG Apr 30 (ZJQ1017D30) call
> > > option contract at $1.10 (bid).
> > >>
> > >> Stop Loss: $28.41
> > >>
> > >> G
> > >>
> > >> --- In ConservativeOptionS trategies@ yahoogroups. com, "Gilbert" <gilbert_arevalo@ > wrote:
> > >> >
> > >> > "Blue Coat Systems (BCSI) roared out of a cup-without- handle pattern. Volume was triple its usual pace. It's now less than 3% past its 31.15 buy point." IBD states in the recent TBP (The Big Picture).
> > >> >
> > >> > We entered BCSI last Tuesday and yesterday's NUS is also (now) doing ok. Of course, the high-octane picks are entirely dependent on the overall market trend - so we'll keep out strict stop rules.
> > >> >
> > >> > My Covered Call Candidates watchlist (see posting shortly) has a couple of interesting
> > > biotech picks (which I avoid). But it has been a top sector and AMLN and ITMN stand out.
> > >> >
> > >> > Apparently I can buy ITMN at 23.3 and sell the MAR 17.5 call for $9. That'll give a "break-even" of 14.3 and a 13.73% return for a 1.8 week holding.
> > >> >
> > >> > Very enticing - but I 'll avoid.
> > >> >
> > >> > G
> > >> >
> > >> > --- In ConservativeOptionS trategies@ yahoogroups. com, "Gilbert" <gilbert_arevalo@ > wrote:
> > >> > >
> > >> > > Monday, March 8, 2010
> > >> > >
> > >> > > 11:03 am EST
> > >> > >
> > >> > > Bought 100 shares of NUS (Nu Skin Enterprises, Inc.) at $29.38 (ask).
> > >> > >
> > >> > > Sold (1) NUS Apr 30 (NUS1017D30) call
> > > option contract at $1.10 (bid).
> > >> > >
> > >> > > Stop Loss: $28.28
> > >> > >
> > >> > > G
> > >> > >
> > >> > > --- In ConservativeOptionS trategies@ yahoogroups. com, "Gilbert" <gilbert_arevalo@ > wrote:
> > >> > > >
> > >> > > > Tuesday, March 2, 2010
> > >> > > >
> > >> > > > 10:35 am EST
> > >> > > >
> > >> > > > Bought 100 shares of BCSI (Blue Coat Systems, Inc.) at $29.94 (ask).
> > >> > > >
> > >> > > > Sold (1) BCSI Mar 30 (IYU1020C30) call option contract at $0.85 (bid).
> > >> > > >
> > >> > > > Stop Loss: $29.09
> > >> > > >
> > >> > > > G
> > >> > > >
> > >
> > >> > > > --- In ConservativeOptionS trategies@ yahoogroups. com, "Gilbert" <gilbert_arevalo@ > wrote:
> > >> > > > >
> > >> > > > > This board became very active with the 2009 rally in stocks. Now that we
> > >> > > > > are in a correction, an important part of my long-term growth strategy
> > >> > > > > is to avoid new buys until a new rally is confirmed. As you may have
> > >> > > > > noticed I tend to invest with covered calls using growth stocks. This
> > >> > > > > only works during uptrends, which I can target very well using IBD
> > >> > > > > criteria. It is imperative to cash out once we reach our stop-loss
> > >> > > > >
> > > price.
> > >> > > > >
> > >> > > > > Just take a look at how many former leaders are fully tanking into steep
> > >> > > > > price loss. Right now "cash is king" - at least for my approach.
> > >> > > > >
> > >> > > > > [The image
> > >> > > > > "http://img215. imageshack. us/img215/ 2604/promp012210 .jpg" cannot
> > >> > > > > be displayed, because it contains errors.]
> > >> > > > >
> > >> > > > > G
> > >> > > > >
> > >> > > > > --- In ConservativeOptionS trategies@ yahoogroups. com, "Gilbert"
> > >> > > >
> > > > <gilbert_arevalo@ > wrote:
> > >> > > > > >
> > >> > > > > > Thursday, January 21, 2010
> > >> > > > > >
> > >> > > > > > 11:00 am EST
> > >> > > > > >
> > >> > > > > > Bought (2) NANO Feb 12.5 (NTQBV) call option contracts at $0.50 (ask).
> > >> > > > > >
> > >> > > > > > Sold 200 shares of NANO (Nanometrics, Inc.) at $11.02 (bid).
> > >> > > > > >
> > >> > > > > > G
> > >> > > > > >
> > >> > > > > > --- In ConservativeOptionS trategies@ yahoogroups. com, "Gilbert"
> > >> > > > > gilbert_arevalo@ wrote:
> > >> > > > > >
> > > >
> > >> > > > > > > Wednesday, January 20, 2010
> > >> > > > > > >
> > >> > > > > > > 9:30 am EST
> > >> > > > > > >
> > >> > > > > > > Bought (1) STEC Jan 19 (SQRAT) call option contract at $0.70 (ask).
> > >> > > > > > >
> > >> > > > > > > Sold 100 shares of STEC (STEC, Inc.) at $17.83 (bid).
> > >> > > > > > >
> > >> > > > > > > G
> > >> > > > > > >
> > >> > > > > > > --- In ConservativeOptionS trategies@ yahoogroups. com, "Gilbert"
> > >> > > > > <gilbert_arevalo@ > wrote:
> > >> > > > > > > >
> > >> >
> > > > > > > > > Tuesday, January 19, 2010
> > >> > > > > > > >
> > >> > > > > > > > 10:31 am EST
> > >> > > > > > > >
> > >> > > > > > > > Bought 100 shares of STEC (STEC, Inc.) at $19.32 (ask).
> > >> > > > > > > >
> > >> > > > > > > > Sold (1) STEC Feb 19 (SQRBT) call option contract at $1.45 (bid).
> > >> > > > > > > >
> > >> > > > > > > > Stop Loss: $17.87
> > >> > > > > > > >
> > >> > > > > > > > G
> > >> > > > > > > >
> > >> > > > > > > > --- In ConservativeOptionS trategies@
> > > yahoogroups. com, Gilbert
> > >> > > > > Arevalo <gilbert_arevalo@ > wrote:
> > >> > > > > > > > >
> > >> > > > > > > > > Model Portfolio (15-Jan-2009) update:
> > >> > > > > > > > >
> > >> > > > > > > > >
> > >> > > > > > > > >
> > >> > > > > > > > > G
> > >> > > > > > > > >
> > >> > > > > > > > >
> > >> > > > > > > > >
> > >> > > > > > > > >
> > >> > > > > > > > > ____________ _________ _________ __
> > >> > > > > > > > > From: Gilbert <gilbert_arevalo@ >
> > >> > > > > > > > > To: ConservativeOptionS trategies@ yahoogroups. com
> > >> > > > > > > > > Sent: Tue, January 12, 2010 6:40:39 PM
> > >> > > > > > > > > Subject: [ConservativeOption Strategies] Re: My 2010 CC Trades
> > >> > > > > > > > >
> > >> > > > > > > > >
> > >> > > > > > > > > Here is an example today of an "unwind":
> > >> > > > > > > > >
> > >> > > > > > > > > Tuesday, January 12, 2010
> > >> > > > > > > > >
> > >> > > > > > > > > 1:20 pm EST
> > >> > > > > > > > >
> > >> > > > > > > > > Bought (1) ASIA Jan 30 (EUJAF) call option contract at $0.25
> > >> > > > > (ask).
> > >> > > > > >
> > > > > >
> > >> > > > > > > > > Sold 100 shares of ASIA (AsiaInfo Holdings, Inc.) at $28.60
> > >> > > > > (bid).
> > >> > > > > > > > >
> > >> > > > > > > > > - Model Portfolio update:
> > >> > > > > > > > >
> > >> > > > > > > > >
> > >> > > > > > > > >
> > >> > > > > > > > >
> > >> > > > > > > > > G
> > >> > > > > > > > >
> > >> > > > > > > > > --- In ConservativeOptionS trategies@ yahoogroups. com, Gilbert
> > >> > > > > Arevalo <gilbert_arevalo@ ...> wrote:
> > >> > > > > > > > > >
> > >> > > > > > > > > > With the start of 2010, my $20,000 Model Portfolio update is
> > >> > > > > as
> > > follows:
> > >> > > > > > > > > >
> > >> > > > > > > > > > http://img710.
> > >> > > > > > > > > >
> > >> > > > > > > > > > (test)
> > >> > > > > > > > > >
> > >> > > > > > > > > >
> > >> > > > > > > > > > http://yfrog.
> > >> > > > > > > > > >
> > >> > > > > > > > > > Spreadsheet of trades and graph updates will follow.
> > >> > > > > > > > > >
> > >> > > > > > > > > > G
> > >> > > > > > > > > >
> > >> > > > > > > > > >
> > >>
> > > > > > > > > > > > ____________ _________ _________ __
> > >> > > > > > > > > > From: Gilbert Arevalo gilbert_arevalo@ ...
> > >> > > > > > > > > > To: ConservativeOptionS trategies@ yahoogroups. com
> > >> > > > > > > > > > Sent: Mon, January 11, 2010 11:40:33 AM
> > >> > > > > > > > > > Subject: Re: [ConservativeOption Strategies] Re: My 2010 CC
> > >> > > > > Trades
> > >> > > > > > > > > >
> > >> > > > > > > > > >
> > >> > > > > > > > > > Monday, January 11, 2010
> > >> > > > > > > > > >
> > >> > > > > > > > > > 2:11 pm EST
> > >> > > > > > > > > >
> > >> > > > > > > > > > Bought 100 shares of ASIA (AsiaInfo
> > > Holdings, Inc.) at $29.05
> > >> > > > > (ask).
> > >> > > > > > > > > >
> > >> > > > > > > > > > Sold (1) ASIA Jan 30 (EUJAF) call option contract at $0.45
> > >> > > > > (bid).
> > >> > > > > > > > > >
> > >> > > > > > > > > > Stop Loss: $28.45
> > >> > > > > > > > > >
> > >> > > > > > > > > > G
> > >> > > > > > > > > >
> > >> > > > > > > > > >
> > >> > > > > > > > > >
> > >> > > > > > > > > >
> > >> > > > > > > > > > ____________ _________ _________ __
> > >> > > > > > > > > > From: Gilbert <gilbert_arevalo@ rocketmail. com>
> > >> > > > > > > > > > To:
> > > ConservativeOptionS trategies@ yahoogroups. com
> > >> > > > > > > > > > Sent: Thu, January 7, 2010 12:38:28 PM
> > >> > > > > > > > > > Subject: [ConservativeOption Strategies] Re: My 2010 CC Trades
> > >> > > > > > > > > >
> > >> > > > > > > > > >
> > >> > > > > > > > > > Thursday, January 7, 2010
> > >> > > > > > > > > >
> > >> > > > > > > > > > 3:27 pm EST
> > >> > > > > > > > > >
> > >> > > > > > > > > > Bought 100 shares of VIT (VanceInfo Technologies, Inc.) at
> > >> > > > > $20.21 (ask).
> > >> > > > > > > > > >
> > >> > > > > > > > > > Sold (1) VIT Jan 20 (VITAD) call option contract at $0.75
> > >> > > > >
> > > (bid).
> > >> > > > > > > > > >
> > >> > > > > > > > > > G
> > >> > > > > > > > > >
> > >> > > > > > > > > > --- In ConservativeOptionS trategies@ yahoogroups. com,
> > >> > > > > "Gilbert" <gilbert_arevalo@ ...> wrote:
> > >> > > > > > > > > > >
> > >> > > > > > > > > > > Wednesday, January 6, 2010
> > >> > > > > > > > > > >
> > >> > > > > > > > > > > 9:45 am EST
> > >> > > > > > > > > > >
> > >> > > > > > > > > > > Bought 200 shares of NANO (Nanometrics, Inc.) at $11.38
> > >> > > > > (ask).
> > >> > > > > > > > > > >
> > >> > > > > > > > > > > Sold (1) NANO Jan 12.5
> > > (NTQAV) call option contract at $0.15
> > >> > > > > (bid).
> > >> > > > > > > > > > >
> > >> > > > > > > > > > > Stop Loss: $11.23
> > >> > > > > > > > > > >
> > >> > > > > > > > > > > Sold (1) NANO Feb 12.5 (NTQBV) call option contract at $0.75
> > >> > > > > (bid).
> > >> > > > > > > > > > >
> > >> > > > > > > > > > > Stop Loss: $10.63
> > >> > > > > > > > > > >
> > >> > > > > > > > > > > G
> > >> > > > > > > > > > >
> > >> > > > > > > > > >
> > >> > > > > > > > >
> > >> > > > > > > >
> > >> > > > > > >
> > >> > > > > >
> > >> > > >
> > > >
> > >> > > >
> > >> > >
> > >> >
> > >>
> > >
> > >
> >
>
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