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ByLoSellHi

Has anyone here ever cashed out of their outright ownership positions, and used all or part of their profits to re-enter into all option contract positions for a specific period of time (I'm specifically interested in a roughly one year period)?

In other words - You sold all equity holdings and used the proceeds to only buy option contracts, such as one year call and/or put options?

Thanks.
 
No replies huh? I´ll assume that your idea is either incredibly smart or incredibly stupid. Only one way to find out, happy trading.
 
Quote from eusdaiki:

No replies huh? I´ll assume that your idea is either incredibly smart or incredibly stupid. Only one way to find out, happy trading.
More...

Nothing ventured, nothing gained.
 
It sounds like an interesting idea, since it is quite different.

On the one hand, you´ll have the chance to diversify yourself much further with the same capital, this can be an advantage, or a problem. Holding 100 companies instead of 10, {while holding basically the same volume on all present components of your portfolio}, means that you´ll need much more time to do your homework. But, if you manage to do it you´ll get lower risk on the same money with higher returns.
On the other hand, if you use this strategy to have basically larger positions on the same components of your portfolio, in this case you are getting much higher risk, and it´s probably not a very good idea.


I think the best way to go is to start small. Basically making a small fund to try this strategy, get to know it´s up´s and down´s, tweak it and learn what Murphy has to say about the whole idea without losing your shirt.

Happy Trading. :D
 
I've had the want to do it...the problem is that the few times I would have liked to do so there were no options available. They were small caps.
 
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