Discussion in 'Options' started by rowenwood, Apr 12, 2004.

  1. my current position is:

    50% of my portfolio value in LU May $4 Calls bought at .57

    Because I'm up 15% since April I figure I can take this risk against my recent profit.

    My next buy, using the other 50% of my portfolio will be to gain more LU May $4 Calls. I will make this purchase when and if the SPX breaks the 1150 resistance.

    So basically if LU May $4 calls drop to .45 per contract I'll liquidate everything and break-even.

    Besides this situation I'm up 100% overall since I began trading in July 2003.

    Let me know what you think, but please post only non-sarcastic and friendly posts. I'll truly respect any intelligent advice.

    Thank you.
  2. Weasel


    Sellers make the money. If you own LU, why not sell covered calls against it?
  3. Because I don't have the frame of mind of a writer. I'm too new to options to commit to such an advanced strategy. Covered call writing is supposedly a conservative strategy. But, I'm not too well versed in options trading and beside, my current strategy of postion trading seems to work, so for now I'll just keep it simple and apply my basic TA and FA understandings to options speculation.

    I don't own LU shares
  4. abogdan


    Try it though, you'll like it!
  5. I'll probably give it a try at some point.
  6. that exposure is insane, unless you're talking a very small account. LU is essentially a $5 option contract, half that if margined. I see no point in buying gamma on stocks below $10.

    Dump the options and trade the shares, less -edge.

  7. Worst case scenario I'm back to the account value I had on Arpil 1. If I had 1:4
    margin leverage I wouldn't be doing this.

    My best case scenario is more than ten times the possibility of my worst case scenario.

    $11,500 account value
  8. ==========
    Rowenwood ;

    Lots of numbers look well on your stock option;
    including probabllity of SPY again closing above $115 & SPX above 1150.

    Rowenwood ;

    Like a wooden-row -boat next to a killer whale or killer shark;
    personaly would avoid swing trading 100% in any 1 stock or stock option.

    Agree with keeping 50% cash position, not 0%;
    & personaly thats too risky for me also 50% in one stock/stock option.


    Course if you are getting more huge checks from quarterly stock dividends;
    might be fine .
  9. I figured you were trading small, whole different story. Worst case is a gap lower in LU after/before the day session, could see a 50% trimming if the stock were to drop $2.

    Not trying to nit-pick, simply that worst case is usually inconceivable.

  10. Let's hope my harpoon nails her right in the blower. HAR HAR HAR.

    But if you've the time tell me what LU's Fibonacci levels are. I don't have any real software, yet.

    Tell me about the above stated good looking numbers. LU is in a resistance area, but otherwise.
    #10     Apr 12, 2004