Comments on: This Is So Difficult http://theoptionguru.com/blog/2010/01/this-is-so-difficult/ Option Spread Trading for Income Fri, 03 Feb 2012 02:18:00 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Jeff http://theoptionguru.com/blog/2010/01/this-is-so-difficult/comment-page-1/#comment-737 Jeff Wed, 03 Feb 2010 12:10:45 +0000 http://theoptionguru.com/blog/?p=1340#comment-737 Oguru, Thanks for the advice. This comment ended up in my spam folder due to the number of links. I took your advice and re-directed my page. I visited your blog - I see it's new - good luck and post frequently. <em>- Jeff</em> Oguru,
Thanks for the advice. This comment ended up in my spam folder due to the number of links. I took your advice and re-directed my page. I visited your blog – I see it’s new – good luck and post frequently.
- Jeff

]]> By: Jeff http://theoptionguru.com/blog/2010/01/this-is-so-difficult/comment-page-1/#comment-722 Jeff Fri, 22 Jan 2010 21:25:59 +0000 http://theoptionguru.com/blog/?p=1340#comment-722 Bruce, I would <strong>like</strong> to say that you have come to the mountain, but it's really just a mole hill :) When I see stock with great earnings (IBM, GS) and then watch them fall, that is telling me something. Three 2% drops on major indexes in a row excites me in a sick way. I was able to get in a couple of Bear Calls early this week, but it this point it's too late to 'chase' the bear move. Unless you can find a stock that is holding up (advance/decliners was 557/2525 today), it's best to just wait for a bear flag, and when you get confirmation on continuation of the bear trend, jump on it! I don't think the 'sale prices' are at their peak. On the S&P I have a long-term lower channel at 1080 and FIB 23.6% retracement at 1038. Watch for a bounce at one of these levels. We will see if they hold as support or totally break down. We take escalators up and elevators down. Good luck. <em>- Jeff</em> Bruce,

I would like to say that you have come to the mountain, but it’s really just a mole hill :)

When I see stock with great earnings (IBM, GS) and then watch them fall, that is telling me something. Three 2% drops on major indexes in a row excites me in a sick way. I was able to get in a couple of Bear Calls early this week, but it this point it’s too late to ‘chase’ the bear move. Unless you can find a stock that is holding up (advance/decliners was 557/2525 today), it’s best to just wait for a bear flag, and when you get confirmation on continuation of the bear trend, jump on it!

I don’t think the ‘sale prices’ are at their peak. On the S&P I have a long-term lower channel at 1080 and FIB 23.6% retracement at 1038. Watch for a bounce at one of these levels. We will see if they hold as support or totally break down. We take escalators up and elevators down.

Good luck.

- Jeff

]]> By: Bruce http://theoptionguru.com/blog/2010/01/this-is-so-difficult/comment-page-1/#comment-720 Bruce Fri, 22 Jan 2010 16:08:33 +0000 http://theoptionguru.com/blog/?p=1340#comment-720 So if it was difficult on January 17th then how do you describe the market here on January 22nd? I was gaining more and more confidence in the past month (always a dangerous sign). Now a correction (small or large is a matter of perspective). So as I squint at the headlights in my eyes I need to make some decisions. Embrace the bear and profit from the trend or buy up my favorites when they are on sale? I can't decide and instead have decided to commiserate with The Option Guru. Any sage advice? So if it was difficult on January 17th then how do you describe the market here on January 22nd?

I was gaining more and more confidence in the past month (always a dangerous sign). Now a correction (small or large is a matter of perspective).

So as I squint at the headlights in my eyes I need to make some decisions. Embrace the bear and profit from the trend or buy up my favorites when they are on sale?

I can’t decide and instead have decided to commiserate with The Option Guru. Any sage advice?

]]> By: Oguru http://theoptionguru.com/blog/2010/01/this-is-so-difficult/comment-page-1/#comment-718 Oguru Tue, 19 Jan 2010 13:01:45 +0000 http://theoptionguru.com/blog/?p=1340#comment-718 Hi Jeff, Just a piece of advice towards your site structure. Its good, Jeff ! I am reading your Trade logs. I noticed that the page http://theoptionguru.com/ has no Index value in Google, But http://theoptionguru.com/blog has PR 2. Why not you modify your http://theoptionguru.com/ to point to http://theoptionguru.com/blogs/ and http://theoptionguru.com/archives (or something like that) point to http://buywrite.wordpress.com ? This will be good for google to index and earn good PR in the long run. Just my two cents ... By the the way I am writing with the same name "optionguru" in my Indian Options Blog. Hi Jeff,

Just a piece of advice towards your site structure. Its good, Jeff ! I am reading your Trade logs. I noticed that the page http://theoptionguru.com/ has no Index value in Google, But http://theoptionguru.com/blog has PR 2. Why not you modify your http://theoptionguru.com/ to point to http://theoptionguru.com/blogs/ and http://theoptionguru.com/archives (or something like that) point to http://buywrite.wordpress.com ?
This will be good for google to index and earn good PR in the long run.
Just my two cents …
By the the way I am writing with the same name “optionguru” in my Indian Options Blog.

]]> By: Jeff http://theoptionguru.com/blog/2010/01/this-is-so-difficult/comment-page-1/#comment-717 Jeff Tue, 19 Jan 2010 01:37:10 +0000 http://theoptionguru.com/blog/?p=1340#comment-717 Paul, You're right, I am not always 100% in every month. For instance, right now I am only 75% in. I also don't expect every month to be profitable, so I have set a conservative target of 20-25% with reality in mind. Why not Buy-Writes? That's the way I used to do it, with a buy-write (the name of my former blog). Over time, the many people that contribute to the JustCoveredCalls Yahoo group have convinced me that there is another way that is a bit less risky. Selling a Naked Put (a Covered Call is sometimes called a synthetic Naked Put) allows me more flexibility on how I enter the stock. If I was doing a Buy-Write, I would be looking for a stock that is at the top of its current trading range - that enable me to maximize my Call premium while minimizing the possibility of expiring ITM. With a Naked Put, I am looking to buy at the bottom of its current trading range in order to minimize the option expiring ITM while looking to sell a strike that would put my cost basis below a recent low. Even though I would be happy to own any of the stocks I am trading in my Conservative Account, the ideal scenario is to have the stock turn bullish after I sell the Put and then just keep the premium without ever owning the stock. Ultimately, it comes down do a question of style and what you are comfortable with. If the stock turns bullish and I have a Naked Put, I have a bit more flexibility on what I can do to recover and I don't have to worry about the stock. Again, just a matter of what you are comfortable with. So if you're not sure what it is, then keep doing what you are doing. BUT, if you have the time and a paper account, give the Naked Put strategy a try. For instance, my NYX trade is working according to the book. I entered on 11/25 with a JAN 25 strike and a cost basis (if Put the stock) of 23.88 which was well below the recent low on 11/3 of 25.01. Then on 1/11 I rolled it to FEB 26 for an additional 0.80 credit and a new Cost Basis of 24.08 which is right at the last low on 12/08 of 23.98. I am not going to worry about this trade until the second week of February - kind of a nice since there are plenty of other things to worry about. Right? <em>- Jeff</em> Paul,

You’re right, I am not always 100% in every month. For instance, right now I am only 75% in. I also don’t expect every month to be profitable, so I have set a conservative target of 20-25% with reality in mind.

Why not Buy-Writes? That’s the way I used to do it, with a buy-write (the name of my former blog). Over time, the many people that contribute to the JustCoveredCalls Yahoo group have convinced me that there is another way that is a bit less risky. Selling a Naked Put (a Covered Call is sometimes called a synthetic Naked Put) allows me more flexibility on how I enter the stock. If I was doing a Buy-Write, I would be looking for a stock that is at the top of its current trading range – that enable me to maximize my Call premium while minimizing the possibility of expiring ITM.

With a Naked Put, I am looking to buy at the bottom of its current trading range in order to minimize the option expiring ITM while looking to sell a strike that would put my cost basis below a recent low. Even though I would be happy to own any of the stocks I am trading in my Conservative Account, the ideal scenario is to have the stock turn bullish after I sell the Put and then just keep the premium without ever owning the stock. Ultimately, it comes down do a question of style and what you are comfortable with.

If the stock turns bullish and I have a Naked Put, I have a bit more flexibility on what I can do to recover and I don’t have to worry about the stock. Again, just a matter of what you are comfortable with. So if you’re not sure what it is, then keep doing what you are doing. BUT, if you have the time and a paper account, give the Naked Put strategy a try. For instance, my NYX trade is working according to the book. I entered on 11/25 with a JAN 25 strike and a cost basis (if Put the stock) of 23.88 which was well below the recent low on 11/3 of 25.01. Then on 1/11 I rolled it to FEB 26 for an additional 0.80 credit and a new Cost Basis of 24.08 which is right at the last low on 12/08 of 23.98. I am not going to worry about this trade until the second week of February – kind of a nice since there are plenty of other things to worry about. Right?

- Jeff

]]> By: Paul http://theoptionguru.com/blog/2010/01/this-is-so-difficult/comment-page-1/#comment-715 Paul Mon, 18 Jan 2010 23:25:24 +0000 http://theoptionguru.com/blog/?p=1340#comment-715 Jeff If you average 20 -25% annually on 3 to 4% month returns could I assume you are not in the market half the time ... as 3 to 4 would translate to 36 to 48 .... or am I missing something (more likely). Could you explain why you do a naked put in place of just buying the stock and writing a covered call? For some reason a feel a lot more secure doing a buy write .... not sure what it is... Jeff

If you average 20 -25% annually on 3 to 4% month returns could I assume you are not in the market half the time … as 3 to 4 would translate to 36 to 48 …. or am I missing something (more likely).

Could you explain why you do a naked put in place of just buying the stock and writing a covered call? For some reason a feel a lot more secure doing a buy write …. not sure what it is…

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