Dr. Joe:
I was trying reinact the past week and devise a plan that allows protection for these bearish times.
It really doesn't make sense to spend so much for home insurance and next to nothing for porfolio insurance.
I think there is nothing wrong with setting aside 3-4% a year for protect against possibly 2-3 10%+ corrections in a year.
My thought was to use your leap diagonal strategy only with PUTS. Buying a Dec 2011 (not sure of correct Delta) and selling current month PUTS against it. Adjustments can be made as the market moves up and down helping to take in more premium, cut costs and assure some added protection should the market go against me.
What do you think?
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MARKETPLACE
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