Jeff,
Nice video. I always get a kick out of the names folks come up with to
describe option strategies. What you got there is a synthetic call
calendar spread on SID.
Covered calls have gotten a bad rap lately since folks got gun shy after
the market sold off. Discover Options did a nice study to show the
effects of covered call campaigning using the QQQQ as their underlying.
It did a nice job of demonstrating the strengths and weaknesses of the
strategy and demonstrated the importance of being consistent with the
strategy.
I'd suggest back testing this "Super Put" because I have a feeling its
not going to work quite like you think it may because you now have an
upside break-even point which is not present with a straight covered
call. When I trade calendars, which is what the Super Put is, I tend to
keep the back month option just one or two months out and have cash in
reserve. When the price of he underlying reaches on my the break-even
points, I'll put another calendar on to broaden the profit zone. That
type of adjustment won't work as well with you Super Put because the
capital requirement to buy the stock is so much greater. So, my guess
is that John Brasher will have you manipulate the trade by rolling the
existing put or short call.
I've seen a couple other trading services offer similar strategies, too.
It would be kind of fun to have a contest to see who comes up with the
most clever name. I'd lose because I just call it a synthetic calendar
spread. Boring, huh?
Christopher Smith
TheOptionClub.
--- In OptionClub@yahoogro
>
> I have not posted hardly at all in this group since I spend most of my
time int he Just Covered Calls group. But they don't want me to talk,
discuss or even mention SuperPuts in that group.
>
> A SuperPut is a Covered Call with a long-term protective put. The idea
is to use the Put as protection and continue to write Covered Calls
against the underlying until the time is right to exit - depending on
many factors.
>
> The term SuperPut is a trademark of the CallWriter service and web
site. I am an avid subscriber to that service and I have been studying
SuperPuts for a few months now. I decided to open on in my demo account
at Interactive Brokers and test the concept in this undecided market.
>
> I make a lot of demonstration videos and I made on entering a SuperPut
on SID today using TWS Option Trader. You can catch the video at YouTube
(http://www.youtube.
http://buywrite.
on my blog).
>
> I plan to keep producing videos on this trade as I make adjustments
and finally exit in the future.
>
> Comments and inputs are welcome.
>
> Jeff W.
>
To unsubscribe from TheOptionClub, send an email to:
OptionClub-unsubscribe@yahoogroups.com
Change settings via the Web (Yahoo! ID required)
Change settings via email: Switch delivery to Daily Digest | Switch format to Traditional
Visit Your Group | Yahoo! Groups Terms of Use | Unsubscribe
No comments:
Post a Comment