Notwithstanding the sidebar semantic discussion, my point in starting this thread was to point out that this strategy is consistently profitable, particularly in these terrible financial times.
Notwithstanding the sidebar semantic discussion, my point in starting this thread was to point out that this strategy is consistently profitable, particularly in these terrible financial times.
Any strategy works, if it is the correct stategy for the times. Last year, I did four covered puts using the ES and a front month PUT that was slightly ITM. Placed this trade at the close of Friday--the Friday before MLK's b-day. The market tanked 60 points..I was up about 36 points (60 points gain from the ES and a 24 point loss from the PUT. Because of the holiday, I really couldn't close out the trade because of a lack of market makers for the option. Then, the FED acted early Tuesday to push the market up before the 9:30 open. Fortunately, I was able to close out this trade before then to gain 25 points. So, of course, I tried the same strategy with the March options and lost 15 points. If I was paying attention to the market and the VIX, I should have changed strategies.
There are other considerations here...mostly money management stuff. I'll elaborate if there is an interest.
4Q [/B][/QUOTE]
Yes do. Also add to your discussion the management of the strike (from trade to trade), and what you do with profits (do you set them aside, or compound them, etc).
