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Doesnt that require you to have a LOT of cash for the margin to naked short and then double down? I would think selling otm call spread be a better alternative, everything else stays the same (ie: try to sell after a big move up etc..) why take on such risk? selling atm naked calls...

i am sure someone will correct me with their math. But i just use a very simple rule to come up with 2.5x. Theoritically say at beginning of month1, month1 premium is $1, month2 premium is $2, you basically make the same amount in 2 months period, but if selling month2 you will have to...

oo of course not, who on earth would hedge downtrend risk with a CC :D

I wouldnt call it the worst, it's just one of the strategies when your outlook of the underlying is sideways and dont want to take on additional risk, then you sell covered calls. At least that's the reason i use when i sell CC.

Good luck with that...have you even seen their $2500 car? Noone in america will be caught dead driving that. Besides the japanese are already kicking american automakers asses, if tata needs to compete it's with the japanese not american automakers. If ford does sell jagaur, it will be a...

i did wait until after this month to sell covered calls. 1/24 is earning report and a few days later fed rate meeting. The money you make from 1 month cc isnt enough in my opinion to miss the chance of a pop. After this month, things should stabilize somewhat, then you can look a good...

ETFC seems to be getting their acts together, with confirmation of new ceo coming, a turnaround plan in place, and continued reduction of their mortgage portfolio. This month will be wild with earning report on 1/24 and fed meeting by monthend. In term of market signs, when a stock...

wtf are you guys talking about, this isnt the yahoo finance board....

I dont know, noone knows. But that is a possibility. However i pulled trigger at $2.3 today, risking 15% of my account. The technical still looks like a horror show as i said when it was at 3.8 on another thread. But i think the knife has fallen far enough. It is still more of a calculated...

commiebat, thanks for the clarification that was very helpful.

this brings up a good question, if you have 2010 $5 call, what happens if etrade gets bought out tomorrow by amtrade for $6. Does that mean now my 2010 $5 call will be worth $1 and lose all time premium? or do they transfer the option over to the amtrade options?

i dont understand, i can buy 100 share for $320 or 1 contract of 2010 5 call for $120. If it goes bankrupt, i lose $120 instead of $320? The doubling is true but only if it doubles by expiration at 2010 jan. Also you would only lock $120 instead of $320 for 2 years, leaving you with $200...

:confused:

i like chris' idea, buy the 2010 $5 call at $1.2. Basically if etfc doesnt go bankrupt, it should bounce back. If it does go bankrupt, you lost 1.2 instead of 3.2 (underlying price)

Looks like i am late to the party, this questions is mostly aimed at maverick. Are you saying there is no edge in selling option vs buying option? or only if they have the same delta? I will use LEH (65.44) as example since i am familiar with the stock. Lets say i think the underlying is...

Hi gnome, you talked about risk management as the most important part of being a sucessful trader. Can you give some specific examples how you do risk management? 1) For example pick a common stock: ebay. Let just assume you think it formed a double top and think it's on the way down to...

again you are missing the point, if it's just hyperinflation without the breakdown of the government, then dollar would still be accepted, yes it may cost $100 to buy an apple but paper dollar would still be the currency of the country. So you are talking about hedging against inflation using...

i do understand the theories, greeks, etc about options... what i lack is enough experience to apply them properly. So was hoping this thread would offer some real how-to so speak to do adjustments and reduce risk based on what i had - 40 losing positions of naked calls. Anyway i think it...

haha, quote of the week. /agree ps: Bad feeling, i wasnt talking about you but just the theme of this discussion. If you want to buy some gold coins or what not to masterb...err look at, that's a different story.

I am sorry but this whole discussion about buying gold/silver in case of a doomsday situation is just ridculus. Basically the idea of buying gold/silver from what i read based on the discussions is that US dollars will lost enough confidence/value that it is no longer accepted by the public...