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this mornind you bought your sp500 march future @opening price
it hit your target for max intra day high
but you were not sure it is the top or not
(we had days whith dow up 200 points)
to lock in your proffit (without exiting your position) you buy your june
990 put
there are only 2 things that can happen
if sp500 continue to go up . you continue to make money (but at a rate of
aprox
$200 for each sp500 up point instead of $250)
but if the opposite happen
(like it did)
and sp500 closed aprox 10 points from its high
now. you stay overnight.
net net you are locked your proffit as if you close your position at high
of day!!!
fri morning sp500 sell off another 5 points . you sell your put
(and close your long sp500)
or stay long and if sp close at 1000. you made mint in 2 days
insurance means a 990 put.
it locked your proffit. and it gave you pease of mind staying long overnight .
even if market sell off at night session your proffits are still locked !!
Most traders make their broker rich instead of looking at the big picture
.. ..
in 1997 if you just bought 1 sp500 and 1 sp 500 put (and roll over every
quarter)
you could be a full time trader and not work at all
making net net above and beyond of what average salary is.
as long as this economy is in this shape one can do the same for this year
happy trading
Amnon Ben Aroya
p,s if you play the short moves
sp hi 02/04/98- +or - 1 day
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