You understand that you need approx 3 MILLION in margin available to put that trade on, right? Money that cannot be used for anything else? And that the margin requirement may increase if the position goes against you? Also, you seem to be forgetting that both of the ETFs you mentioned are NOT long term investment instruments, and you'll find that unless there is a parabolic move in one direction (impossible in a 2 year horizon), they will most likely go down even if the index is up?
I don't understand why all u baboons are going against this trend. Its so darn easy to make money if you just go with it. The market will tell us when its time to reverse, and we will know ! But for the time being, quit trying to pick tops. Yes, I do agree that this market will fall again. The US economy is not healthy, and sooner or later it will pay for its failures. But for the time being, for gods sake, just buy the damn market.
Saying that your strategy is a warren buffet style strategy is like saying that sloshing around in your bathtub with a swimsuit on is a michael phelps style strategy.
Having lived thru 1987 I get the shivers when I see something like this OP. People lost vast sums of wealth that day. Some people on margin lost majority of their investments. As legend has it, the only people that were literally carried out on stretchers were a few of the CBOE market makers and traders. When options, like stocks, traded in fractions there were a select few that made more than a nice living 'selling teenies'. One gentleman in particular was 2 months from his announced retirement, had $5+ milllion in the bank, alot then, and had a full book of short teenies. These puts were so OTM that they were only bid 1/16 or a teenie, the lowest increment. He was short 10's of thousands which amounted to only a few hundred thousand bucks. By the end of the day, even with scrambling to cover and shorting stocks that he could find a bid and a plus tick at the time, he was out about $50,000,000.00 Carried off the floor on a stretcher. The only reason I relay this story is that any time someone says lets short some puts, it's the first thing that comes to my mind, 22 years later. Good luck!
Great idea, crgarcia... Pls keep selling. Make sure those puts are cheap. Sell the outstrikes, while you're at it. You'll have to do a lot, but that shouldn't be an issue for a big boy like yourself.
Good strategy for long-term players with a lot of cash set aside. Very bad strategy for people on margin or small time speculators, actually can be fatal.