drjoe,
Thanks for sharing that. Another step on my learning curve.
On a separate issue, I'm finding that the short puts tie up a lot of capital. My tendency has been to sell a few months out for the larger premium, but perhaps I should start concentrating more on a closer time frame and more frequent turnovers. The issue there of course is that commissions become a larger factor. Anyway it's always a balancing act isn't it? :-)
Lou
--- In ConservativeOptionS
>
> lou,
>
> i use protective puts for my short puts......i sell 3 short puts.....one atm, one 5% otm and one 10% otm with a contingent order to buy protective put when underlying drops 10%
>
> drjoe
>
> --- In ConservativeOptionS
> >
> > Which is why I am exploring protective puts.
> > Lou
> >
> > --- In ConservativeOptionS
> > >
> > > Which is why I do not trade individual stocks..
> > >
> > >
> > >
> > > From: ConservativeOptionS
> > > Sent: Wednesday, April 07, 2010 11:32 PM
> > > To: ConservativeOptionS
> > > Subject: Re: [ConservativeOption
> > >
> > >
> > >
> > >
> > >
> > > 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- <http://finance.
> > >
> >
>
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