jon just as hank posted....the market in 30 days can be completely different. if the market drops 10% during the first month i end up add positions with strikes well below the initial one. i usually end up with different strikes but that is a not a problem. please note there is nothing special by this method just what i do. drjoe
--- In ConservativeOptionS
>
> Joe,
> Â
> Thank you for taking the time to share your strategies with the group.
> Â
> Could you explain the advantages you see in 'legging in' to the position, as opposed to selling all 15 puts for the near month? Doesn't the longer term mean that there is more need for adjustments; or if you do not adjust, having puts with very little time value?
> Â
> Jon G.
>
> --- On Wed, 12/2/09, HankF <hanksterr@.
>
>
> From: HankF <hanksterr@.
> Subject: [ConservativeOption
> To: ConservativeOptionS
> Date: Wednesday, December 2, 2009, 6:58 AM
>
>
> Â
>
>
>
> Hi Joe,
> I think your scale idea is very good.
> The market could be very different in 30, 60 days.
> Hank
>
> --- In ConservativeOptionS trategies@ yahoogroups. com, "joe & leigh" <gass20@> wrote:
> >
> > i don't want to sit down and write a detailed paper so people can try to follow to the letter. so, instead, let's all discuss short puts.
> >
> > let's start with a discussion of what equity do you trade and how do you determine which one to trade? what expiration do you pick? and what strike do you pick?
> >
> > after a discussion of the above we can discuss management up until expiration, then management at expiration, and if assigned, what to do next?
> >
> > first, i only trade index etf's almost all my short puts have been iwm, qqqq, spy, eem but mostly iwm. i currently have iwm and qqqq short puts.
> >
> > second, i decide how many contracts do i want to have outstanding. for example lets say i chose 15 contracts for iwm.
> >
> > third, i use 90 days to expiration and i leg into the position.
> > lets say it is november expiration. i will sell 5 contracts with feb expiration. at december expiration i will sell 5 contracts with march expiration and at january expiration i will sell the last 5 contracts for april expiration. each successive month will have 5 contracts therefore coming to expiration.
> >
> > fourth, i choose the first strike out of the money.
> >
> > fifth, i do not do naked puts. i have 50% secured in a fixed income etf and 50% in cash in the margin account. i do not and do not recommend anyone using margin especially someone new to options and short puts.
> >
> > sixth, i do look at charts...i like to look at 1 month and 3 month linear regression channels, macd, sto, and ma's ....i have no hard fast rules but i like to get an idea that it is definitely in an intermediate term uptrend and more in the oversold than overbought situation.
> >
> > so let's here from the rest of you and after a few days of discussion we can move onto management after the trade is executed.
> >
> > drjoe
> >
>
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