Bill,
Actually I'm trying to build a strategy around spread options, not dividend paying stocks. I would consider dividend paying companies for a portion of the portfolio, but the basis would be options.
My concern is controlling risk and I'm not sure what sort of sustainable return I might be able to manage while still keeping risk levels acceptable (<2% of portfolio on any single trade).
Lou
--- In ConservativeOptionStrategies@yahoogroups.com, "bpstocks00" <bpstocks@...> wrote:
>
> Lou,
>
> FWIW, I agree with Fred. 5% per month is not achievable in the long
> run. If you are averaging a 1% increase in portfolio net worth
> consistently, month after month, in a conservatively managed portfolio,
> you're doing well, IMnsHO.
>
> Of course, these days, there is a stock out there that's paying a 13%
> dividend... LOL. But that's only because it used to be a $40 stock
> paying 3% and now it's a $7 stock.
>
> Bill
>
>
>
>
> --- In ConservativeOptionStrategies@yahoogroups.com, fred barbour
> <barbour2p@> wrote:
> >
> > Lou,
> >
> > There is a direct relationship between risk and reward and imo 5% per
> month is not sustainable over any extended period of time.
> >
> > I have found out how to control risk and my returns are based on 87
> weeks of trading so far.
> >
> > Fred
> >
> >
> >
> >
> > ________________________________
> > From: Louis loupi3@
> > To: ConservativeOptionStrategies@yahoogroups.com
> > Sent: Fri, July 2, 2010 2:27:55 PM
> > Subject: [ConservativeOptionStrategies] Re: VVUS again
> >
> > Â
> > Fred,
> > I can see that happening, but since I'm just getting started and
> hoping I'll be able to allow enough wiggle room and keep risk at a
> mnimum, I haven't had to face that situation yet.
> > Although my current goal is 5% monthly, I don't yet know haw practical
> that will turn out to be, and all other things being equal, I'd be more
> than happy with 30-40% pa.
> > Have you stopped doing condors? Are you getting your results with cc's
> and csp's?
> > Lou
> >
> > --- In ConservativeOptionStrategies@yahoogroups.com, fred barbour
> barbour2p@ wrote:
> > >
> > > Lou,
> > >
> > > What went wrong is that the vix at the time was around 50 and when
> the market went directional the RUT price blew through my short strikes
> and as I adjusted to the next month the price kept going down so I kept
> losing more money and bailed.
> > >
> > > I now enjoy 30-40% annual returns with minimal risk but it
> took a long time to figure it out...many times the attraction of high
> monthly yields overcome the pysche of traders and they don't fully
> realise the risk dangers in trading these spreads.
> > >
> > > Never again for me...
> > >
> > > Fred
> > >
> > >
> > >
> > >
> > > ________________________________
> > > From: Louis loupi3@
> > > To: ConservativeOptionStrategies@yahoogroups.com
> > > Sent: Thu, July 1, 2010 10:55:56 PM
> > > Subject: [ConservativeOptionStrategies] Re: VVUS again
> > >
> > > ÂÂ
> > > If you care to talk about it, I think we could learn from your
> experience and your analysis of what went wrong.
> > > Lou
> > >
> > > --- In ConservativeOptionStrategies@yahoogroups.com, fred barbour
> <barbour2p@> wrote:
> > > >
> > > > I did a condor trade once using 6 contracts,did the appropriate
> management moves when the markets turned directional..lost $6350,could
> have lost alot more..sure was fun..."not".
> > > >
> > > > Fred
> > > >
> > > >
> > > >
> > > >
> > > > ________________________________
> > > > From: Louis <loupi3@>
> > > > To: ConservativeOptionStrategies@yahoogroups.com
> > > > Sent: Tue, June 29, 2010 11:18:10 PM
> > > > Subject: [ConservativeOptionStrategies] VVUS again
> > > >
> > > > ÂÂÂ
> > > > I finally took a little bite and entered an order for a couple of
> contracts on a condor. This is my first condor so I just want to get my
> feet wet without getting nervous.
> > > > The details (all July): long put @ 5, short put @ 6, short call @
> 15, long call @ 16. Net credit if filled .60 (between bid/ask).
> > > > Max profit 60 between 6 and 15; max loss 40 below 5 or above 16;
> breakevens at 5.40 and 15.60. It appears to be a fairly conservative
> position.
> > > > Two questions I have:
> > > > First, how do I figure profit? I'm guessing something like the
> difference between the short strike exposures (900) divided by the
> profit or loss, so that if I made the max profit of 60, the profit would
> be 60/900 or 7%? Somehow that doesn't seem correct. It would intuitively
> seem to me to be 100%, but if that were the case, how would I figure a
> $30 profit, or a $20 loss?
> > > > Second, what surprises should I be watching for (other than the
> obvious possible major price swing)?
> > > > Lou
> > > >
> > >
> >
>
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