[TheOptionClub.com] More Radioactivity?

 

List,

I found the "Radio Active" seminar and and Kurt's "Trade Simulator Tool" interesting. I have been mulling over a couple of somewhat related scenarios that I'm not sure about and would like to get some feedback on them please...

1)I didn't hear Kurt mention the tactic of buying >5 month out puts with a Delta more than approximately .9 which would maximize profit on the put allowing one to purchase more stock and a new put contract (...a tad more capital)once the value of it was worth 100 shares.

I was unable to determine when/if he would abandon a married put position. His adjustments mentioned (10 possible, 9 of which "do not add risk") only seemed to mention moves in the underlying going higher. True, the MLV trade did drop, but apparently not significantly as some tend to do. If however a person stayed with the sinking underlying trade, giving it moves enough.(...in either direction) Wouldn't the odds of it becoming profitable increase using the above method given enough time for the stock to move?

2)Why not try the same 4% loss philosophy using directional bias option trades? (I'll call this the "Coin Flip" method. :) Certainly a person could be right at least 50% of the time. (A bit tricky in a fast moving market, true... perhaps best to avoid during rush hour trading?)

winged

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