thanx trader666 great stuff
My goal is 15% a year... so what strategy?
- Thread starter SuperBanda
- Start date
thanx trader666 great stuff
yes, but when the market is not range bound flat or dropping, then you will cap your winners and still not beat the long term marketavg. which is 7% per year or so?
so basically selling covered calls is predicting when the market will be range bound/flat or dropping, and covering your calls before the market will rise. so still no easy money there, unless your analysis works. but if your analysis can predict when the market will rise, why not just buy stox before market rises and put your money in a mm account in other cases?
so still, i see no difference, why selling covered calls should give you easier your 15% than buy and hold
Quote from trade4succes:
thanx trader666 great stuff
Here's some more humor for you.
thanks for the detailed response
Understand the simple fact that long term trends are tenacious in their nature.
So when the majority of the market try and forecast the long term trend off what happened that week, you'll be able to pick them off if your analysis is any good. ie, when they're all saying 'that's it the trend is now OVER' and dump stock you'll be quietly buying with some confidence.
Be patient as well and don't follow the market on a daily basis.
Good luck and nice to see someone post a realistic goal for once.
So when the majority of the market try and forecast the long term trend off what happened that week, you'll be able to pick them off if your analysis is any good. ie, when they're all saying 'that's it the trend is now OVER' and dump stock you'll be quietly buying with some confidence.
Be patient as well and don't follow the market on a daily basis.
Good luck and nice to see someone post a realistic goal for once.
I'm not sure if you picked up on it... my comment is directed at the simple fact that selling covered calls is nothing but a higher commission, higher slippage, and higher margin requirement way to <b>sell naked puts!</b>
To this day, I still don't get why 'selling covered calls' is even considered a legitimate strategy. I've asked this question many times on ET, and have yet to get a logical answer.
Trade4succes -- I've tested tons of Hershey voodoo over the years... following instructions exactly, getting clarifications, etc. Bottom line is NONE of it was profitable and when faced with results, Jack and his disciples always pull the same old crap which is what I wrote before: to claim I did it wrong, or that it can't be backtested or that backtesting doesn't work. And here he goes again! That's the real humor!
This is his game... playing the wise old man who speaks in riddles. Which serves him by shielding his "methods" from backtesting with obfuscation, which also keeps his naive followers on edge for more. Kinda like a pied piper but all he really has to offer is turds.
Jack, you seem senile so let me remind you of what you posted:
This is his game... playing the wise old man who speaks in riddles. Which serves him by shielding his "methods" from backtesting with obfuscation, which also keeps his naive followers on edge for more. Kinda like a pied piper but all he really has to offer is turds.
Jack, you seem senile so let me remind you of what you posted:
So where's all the other crap you said I left out? It certainly wasn't in your post. ROTFLMAO!
I have a 'new' and 'exciting' way for the covered call crowd to buy and hold stock!:
Let's say you want to buy 100 shares of MSFT. Instead of going about this purchase in the normal manner, here's a 'better' way to do it:
1) Open two options trading accounts.
2) In account A, buy 20 MSFT calls and sell 20 MSFT puts (Same strike, same month). Thus, you're synthetic long 2000 shares of MSFT.
3) In account B, buy 19 MSFT puts and sell 19 MSFT calls. Thus, in this account you're synthetic short 1900 shares of MSFT.
By getting long 2000 synthetic shares in one account, and short 1900 synthetic shares in the other, you've now built the equivalent of a 100 share long position.
However, you've managed to do it in such a convoluted, indirect way; <b>Your slippage, margin requirements and commissions are all drastically worse</b> than if you had just bought your 100 shares the normal way! It's like driving from Chicago to NY, by taking a pointless detour through Texas.
If the above mentioned method appeals to you- Congratulations! You're now ready to start selling covered calls!
Let's say you want to buy 100 shares of MSFT. Instead of going about this purchase in the normal manner, here's a 'better' way to do it:
1) Open two options trading accounts.
2) In account A, buy 20 MSFT calls and sell 20 MSFT puts (Same strike, same month). Thus, you're synthetic long 2000 shares of MSFT.
3) In account B, buy 19 MSFT puts and sell 19 MSFT calls. Thus, in this account you're synthetic short 1900 shares of MSFT.
By getting long 2000 synthetic shares in one account, and short 1900 synthetic shares in the other, you've now built the equivalent of a 100 share long position.
However, you've managed to do it in such a convoluted, indirect way; <b>Your slippage, margin requirements and commissions are all drastically worse</b> than if you had just bought your 100 shares the normal way! It's like driving from Chicago to NY, by taking a pointless detour through Texas.
If the above mentioned method appeals to you- Congratulations! You're now ready to start selling covered calls!
Quote from Rearden Metal:
I have a 'new' and 'exciting' way for the covered call crowd to buy and hold stock!:
Let's say you want to buy 100 shares of MSFT. Instead of going about this purchase in the normal manner, here's a 'better' way to do it:
1) Open two options trading accounts.
2) In account A, buy 20 MSFT calls, and sell 20 MSFT puts (Same strike, same month). Thus, you're synthetic long 2000 shares of MSFT.
3) In account B, buy 19 MSFT puts, and sell 19 MSFT calls. Thus, in this account you're synthetic short 1900 shares of MSFT.
By getting long 2000 synthetic shares in one account, and short 1900 synthetic shares in the other, you've now built the equivalent of a 100 share long position.
However, you've managed to do it in such a convoluted, indirect way; <b>Your slippage, margin requirements and commissions are all drastically worse</b> than if you had just bought 100 shares the normal way! It's like driving from Chicago to NY, by taking a pointless detour through Texas.
If the above mentioned method appeals to you- Congratulations! You're now ready to start selling covered calls!
I suppose selling covered calls would only make sense if you already own the stock... Otherwise you'd be way better off selling naked puts instead... That way you're using way less capital also...
- mnx