If you compare this week's CCC list with the last - and in fact nearly ALL updates over the years. . .and I see a curious divergence.
Call Option Premium rating column shows only a few A+'s with most A- or worse B's! This never happens. Just take note.
Also, with leading stocks that proliferate my list - TA mostly sucks. S/b A++ But there are many offerings that aren't biotech - so go figure.
In my post-trade analysis I have never seen a 70% haircut from biotech selections chosen from my lists. One maybe two were 50% (or a bit more), but the few have been in the 35-45% range and less the juicy 10-12% premium that attracts, along with proper diversification (asset allocation) rules - did NOT kill my strategy.
Just my preference to avoid, but still available on the list. Like I said nearly every month per year traded with CC's in my system (~8-10 mos.) *only* about (1) biotech failed - the rest were (highly) profitable.
Let's just agree that they are more of a headache than anything.
G
--- In ConservativeOptionS
>
> Hundred percent agree with Dr.joe...I had a case that stock opened about 70 above previous day. One bad apple can ruin the entire portfolio.
>
>
>
>
> -----Original Message-----
> From: Gilbert Arevalo <gilbert_arevalo@
> To: ConservativeOptionS
> Cc: CoveredCallFund-
> Sent: Wed, Apr 7, 2010 11:06 am
> Subject: Re: [ConservativeOption
>
>
>
>
>
>
> DrJoe,
>
> This is just what my screen comes up with. I've mentioned this (in detail) to the Group: I used to use (1) biotech holding in my Model Portfolio, but do not anymore (for a few years). Meanwhile, we've seen this group perform just fine!
>
> It used to happen *only* ONCE per year, where the stock opened significantly lower and (less premium) , I'd be looking at a 25% - 35% overall loss on the position. With 20% of my MP in the position = 5-7% MP loss (that would be made up in a few months).
>
> Because my screen is so strict, like I said, this only happened once per year on average and was barely perceptible in my performance charts.
>
> But I gave this sector up just to rid the headache. I did point this out before. Right now premiums are low and biotechs still dominate. I just don't use them anymore, but some may.
>
> G
>
>
>
> From: joe & leigh <gass20@...>
> To: ConservativeOptionS
> Sent: Wed, April 7, 2010 10:45:52 AM
> Subject: [ConservativeOption
>
>
> gil,
> looks like a lot of biomed stocks...... what good is a stop loss if a stock is 40 you got 2 in premiums set stop loss for 38 and bad news comes out and stock opens at 30? which is not unusual especially with biotech/med stocks...and with a stop loss of just the stock minus premium i am truly amazed you aren't stopped out on almost every trade....drjoe
>
> >
> > If you haven't already joined, I'd welcome you to my new Y! Group:
> >
> > http://finance. groups.yahoo. com/group/ CoveredCallFund- Mentoring/
>
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