cactiman
Registered: Dec 2011
Posts: 962 |
07-04-12 10:44 PM
Quote from Put_Master:
I think of myself as a "simple investor" (Anticipating comments on that one).
Whether I'm selling naked puts or credit spreads, I simply select prices to "potentially" get in, at prices I think value hunters will find attractive, and thus lend support to,... or buy up to, if the stock suffers a correction below my strike during a bad market.
I use a combination of basic tech and fundamental analysis.
I also don't follow the "BECAUSE I CAN" idea of investing.
That being, engaging in a lot of different option strategies, simply because they are available, and others use them.
Hoping a stock stays "inside" or "outside" of certain trading ranges, is not for me. Nothing wrong with it, if it works for others. Just not my thing.
I'm also NOT into "rolling", when a stock goes bad.
Nothing wrong wiith it, if it works for others. Just not my thing.
Rolling is simply a fancy way of getting out of a stock trade that is going bad on you, and then getting right back into the same deteriorating stock.
I'd rather look for another stock to earn a similar credit, per the same unit of time,... before I'd consider getting back into the same deteriorating stock i just dumped.
Some investors like to roll, because they believe they're not really taking a loss, or they are minimizing a loss, since they're getting back into the same stock.
I love a good fantasy.
I really have no idea when to sell a stock.
Nor do I know what stock will rise, or how soon it will rise, or how fast it will rise, or when it will stop rising. or why it rose to begin with. Hence the reason i let the option automatically take care of that.
BTW: That very young lady was an excellent Trumpeter. So much poise for her age, and such beautiful tone! >>>
Wasn't that the most beautiful version of that song you've ever herd? [/B]
First, how do feel about the word "Investor" vs. "Trader"? I think Selling Puts makes us Traders. An Investor to me is someone who buys a stock and holds it because he wants to be part "owner" in a company he likes, etc.
Finding a stock that's "Bottomed" or "Consolidating" and Selling Puts at Strikes below the Support level is an excellent way to use Bull Put Credit Spreads.
You get good Credits because the stock has been going down (increasing the cost of the Puts you're selling), and you don't have to worry about it "recovering" to make money, as you would with buying the stock. All it has to do is stay at or above the Support Level and you score.
I'm currently trying to do this with EWG (18 Strike Price), CROX (15 Strike Price) & GLD (150 Strike Price).
Rolling and Adjusting Spreads just incurs lots of commissions, so I generally just close out a loser and then rethink my situation.
I only do Iron Condors with SPY and have had some luck. But got killed with individual stocks suddenly spiking up through the top of my ranges!
Also believe in just working with a couple of techniques and getting them down, rather than trading all different styles at once.
So now I only Sell Bull Put Credit Spreads for stocks, and Sell Iron Condors for SPY as I mentioned.
Have a simple set of rules for both which I can ACTUALLY FOLLOW! Whereas I used to write out lots of rules my "Trader Psychology" couldn't deal with, be all stressed out, and then break them all the time!
P.S.
I was in the Music Business for 45 years, so I know a thing or two about it - and that girl is GOOD!
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