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Hello profitok,
p> I will answer it the best I can As traders we all know that YOU do
p> not anticipate but participate,,
I don't know about that, at least I have seen one models published in
real time on the Internet now for some time which certainly seems to
anticipate price direction. As I try and understand it, I found it
does so by using broad market sentiment. Very intriguing at least.
p> However,, what to do with conservative money which one can NOT
p> afford to loss ANY principle and still create income,,
I belive that this is hanging out on a limb when you make this
statement because while the calls profits maybe a given there are
other considerations. Example, loosing the money on the stocks will
usually exceed the profits gained by the call premium. So in effect
you have lost principle, not to mention! IF the stock is trading 15
and you purchased it at 14 so you sell the 18 call and then the stock
moves to and closes above 22 at expiration. Some like myself would
consider that a loss, a loss of income. Selling calls is not as
conservative as you my think or portray. You certainly CAN loose.
p> Selling covered calls is PARTLY the answer,, because it does create
p> 5-8% MONTHLY income,, but what is the qqq goes down MORE than the
p> premium collected? now you are losing principle!!
Agreed, but
p> the answer is buy a put,, so in Feb. I bought tons of qqq at 38
p> sold the march 39 calls at 3.1 and bought the Feb. 37 put at .75 on
p> theresdy close,, I replace the Feb. put with a march put and bought
p> to close the march call about 10-15 minutes to the close on Fri.
p> and sold the June call market on close this is why I needed that
p> info!!
Very honestly you are in a mess, you did all this why? You are looking
for a way to trade the markets and not risk anything? If you trade
the markets and you make any money I guarantee you that you risk
something. In fact, I have found that even those great traders who
show little drawdown and steady returns, risk tons each month. The
way that the risk are officially reported make's their efforts seem
easy however. Just like magazines and mentors make everything seem
easy. When in fact those who take the risk make the money, and those
who avoid the risk loose money. I didn't know they sold qqq's by the
ton? How many are in a ton?
p> now fully protected again,, and with nice income in my pocket to
p> party,, my guess was 36.5 and I was not that far off (just from the
p> pure open interest) nice weekend
Interesting, because the scenario you paint sounds better that it
looks. Remember cost of doing business, commissions and slippage. Not
to mention the loss of potential income. That income which is cut off
short by your scenario trade is needed to stay in business. Of course
if I were a broker I would love you for all the trades you put on
which could have been just as easily replaced by one actual position.
Yes just go long or short with a willingness to reverse the trade at
some percentage level.
p> Ben
--
Best regards,
TheQuant mailto:thequant@xxxxxxxxx
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