I finally gave up my idea of selling OTM puts!

C

crgarcia

If you sell 30% OTM puts on SPY, Dec 2010, you get less than 1% premium.
You get only about 2% for two years
About 3% for 3 years

Too low premiums
Instead I'm going into top corporate bonds (Coca-Cola, Walmart, McDonalds, perhaps GE)
I earn interests, and probably will have some (modest) price gains during the next panic.

I'm not buying this overrun, overhyped market.
I bought near the bottom, and profited nicely the last year.
 
If you use span instead of reg t margin by selling options on futures on the Sp500 (es) you can sell more and increase your return.
 
Quote from crgarcia:



Instead I'm going into top corporate bonds (Coca-Cola, Walmart, McDonalds, perhaps GE)
I earn interests, and probably will have some (modest) price gains during the next panic.
More...


LMAO

especially if the next panic is about speculation of one of these companies going bust.
 
Quote from crgarcia:

If you sell 30% OTM puts on SPY, Dec 2010, you get less than 1% premium.
You get only about 2% for two years
About 3% for 3 years

Too low premiums
Instead I'm going into top corporate bonds (Coca-Cola, Walmart, McDonalds, perhaps GE)
I earn interests, and probably will have some (modest) price gains during the next panic.

I'm not buying this overrun, overhyped market.
I bought near the bottom, and profited nicely the last year.
More...
If the only possible way to make money in the market was selling 30% OTM SPY puts and the gain was limited to 1% per year then buying corporate bonds might make sense. But whadya gonna do if interest rates rise and your bond value drops? Hold on for X years coveting your meager yield?
 
Being long bonds right now is IMO asking for a whuppin. The closest historical analog to Obama is Carter, and what happened to bond yields under him?

Do you really want to bet on the parlay of low inflation and unattractive equities right now?
 
Remember - bonds fall when any of the above happens:

1) equities become more attractive (ie. recovery)
2) fed rates goes up
3) inflation goes up (due to substitution for commodities and currencies)

If 2) doesn't happen, 3) will. Food for thought.
 
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