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maybe
I am too simplistic but why not sell the qqq's take the tax loss and buy current
ATM or OTM calls (assuming you are bullish) which I do not think would be
considered a wash sale, you could also do it with a rydex index fund. This
would give you a 30% of the loss return from the tax loss and keep you where you
are if the qqq rebound while at the same time it limits your downside. Even if
the qqq are not in a taxable account this would be safer then holding the qqq
assuming you buy enough time. just another thought some with more complex option
experience may see holes in this.
<FONT face=Tahoma
size=2>-----Original Message-----From: Dom Perrino
[mailto:domenick@xxxxxxxxxxxx]Sent: Friday, May 10, 2002 1:03
PMTo: realtraders@xxxxxxxxxxxxxxxSubject: Re: [RT]
qqq
You are right, Options can go from the simple to
the very complex, especially when one tries to repair a heavy paper loss via
various option strategies. One has to consider all possible outcomes and the
evaluate the risk/reward ratio. In Jac,s case he is long qqq,s. He also
appears to be bullish . Writing out of the money covered calls and buying them
back(at a loss) as they approach call price and selling the next cycle of
covered calls would enable him not to loose his position. This would not
entail any great risk. At the same time he could wait for sharp rallies to
sell the calls. (The disadvantage of the leaps is that they don't move as
sharply during a sharp rally).If the market moves up he would most likely be
gaining more on the qqq position than the losses incurred in covering the
calls on the rollovers. If the market goes down he has some income to offst
some of his losses as the qqq goes further down. If my calculation is correct
the NDX would have to go to 2000 just to break even on his qqq,s.
Best Regards,
Dom
<FONT face=Arial
size=2>.
----- Original Message -----
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style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From:
M.
Simms
To: <A
title=realtraders@xxxxxxxxxxxxxxx
href="mailto:realtraders@xxxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxxx
Sent: Friday, May 10, 2002 11:54
AM
Subject: RE: [RT] qqq
Well said
Dom.....BUT it is really important to understand that many option strategies
have "built in" stops......
so being down
20 pts is pretty meaningless from a money management standpoint UNLESS you
have SOLD NAKED CALLS or something like that long or short stangles come to
mind....where there is massive exposure to loss.
<FONT color=#0000ff
size=2>
Other strats
like bull/bear spreads have auto-stops...same for butterflys and
condors.
This does not
mean it would be judicious to retain the loss position for these.....it all
"depends".
<BLOCKQUOTE
style="PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #0000ff 2px solid">
<FONT face=Tahoma
size=2>-----Original Message-----From: Dom Perrino
[mailto:domenick@xxxxxxxxxxxx]Sent: Friday, May 10, 2002 7:57
AMTo: realtraders@xxxxxxxxxxxxxxxSubject: Re: [RT]
qqq
For the record, the below was written by JAC.
I responded to it.
Cheers,
<FONT face=Arial
size=2>Dom
----- Original Message -----
<BLOCKQUOTE dir=ltr
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From:
Ira Tunik
To: <A
title=realtraders@xxxxxxxxxxxxxxx
href="mailto:realtraders@xxxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxxx
Sent: Thursday, May 09, 2002 9:28
PM
Subject: Re: [RT] qqq
If you want to hold on to the QQQ because you don't want
to take a loss, that is the wrong reason. The first loss is the
best loss. If you are looking for a way to correct a trading error
by compounding it with a strategy you don't understand, you are making a
greater error. There are many option strategies that will satisfy
your need because you want to hold onto the QQQ. The other
mistake, I believe, that is being made here is that it appears you are
looking for an option to expire worthless to put money in your
account. Also the wrong attitude. Options were meant to be
traded or used as a safety net. There are other uses for options
but that gets into the sophisticated area of options. Before you
try to save yourself with option time premium erosion call the CBOE and
get all the free information that they have on options. It is
extensive and some of the best options material available at any
price. Hope that things work out for you. Ira.
Dom Perrino wrote:
<BLOCKQUOTE dir=ltr
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<BLOCKQUOTE
style="PADDING-RIGHT: 0px; PADDING-LEFT: 5px; MARGIN-LEFT: 5px; BORDER-LEFT: #000000 2px solid; MARGIN-RIGHT: 0px">
----- Original Message -----
<DIV
style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black">From:
<A title=JAC1390@xxxxxxx
href="mailto:JAC1390@xxxxxxx";>JAC1390@xxxxxxx
To: <A
title=realtraders@xxxxxxxxxxxxxxx
href="mailto:realtraders@xxxxxxxxxxxxxxx";>realtraders@xxxxxxxxxxxxxxx
Sent: Thursday, May 09, 2002
8:06 PM
Subject: Re: [RT]
qqq I am holding a
position in QQQ's down 20 points. Can anyone
recommend a
strategy for writing options on position with the intent of
not selling
position. In other words if position gets close to
getting called
away I want to maintain position rather than realize loss.
Pie in the sky
thinking?
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