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BTW, if there is such a market shift,certain uncovered calls may be
looking good.
I do have several of these on, but since they were not my main
thrust, I did not post them.
John
------------------ Reply Separator --------------------
Originally From: John Cappello <jvc689@xxxxxxx>
Subject: [RT] Uncovered Puts
Date: 01/01/2003 11:23am
Dear Earl,
I did not see your original response until I saw Sue's question. I
agree there is risk and the possibility of a leg down. I feel the
least exposed on EXC and S since it would need to be a rather drastic
short term decline by 1/17/02...but the exposure is there.
I feel most exposed with KG and ITG but I would not mind owning them
with their quality...that is not my plan at present and I would
likely execute my stop loss on the option.
And yes, I will keep my fingers crossed...a little luck never hurt
anyone.
After 3 years of down moves and reading Zweig diligently, a strong
case can be made for a 4th year down.But I have found flaws in Zweig
for this 2003 reminiscent of the years when Grandville was a
perpetual bear.
My next moves are really based upon beta, PE, 2 yr chart and 2 yr.
low plus market action. I may be on the lip of future plays and my
next picks will likely be drastically out of the money with less
income...if I choose to proceed with this approach. So far, my
pessimism may be about 50% of yours...based upon overall low PE's
etc. and not just Dow and S&P PE's. It just amazes me to see the
number of stocks that show up on my screen each month and I only take
on NYSE issues.
So, in essence it will be tricky out there and another method may be
put on the shelf for better timing.
John
------------------ Reply Separator --------------------
Originally From: sue crew <screwy@xxxxxxxxxxxxxx>
Subject: Re: [RT] Uncovered Puts
Date: 01/01/2003 08:51pm
Earl what do you think will be the main driver for a big move down,
in
equity markets.?
cheers
sue
EarlA wrote:
>The income sounds nice, however I don't envy your exposure to
another major
>leg down and I believe it is coming and coming soon (within the next
3-6
>months). Many of these stocks appear to either be resuming major
declines
>(e.g. S) or topping out in bearish formations (e.g. EXC). The only
question
>on my table is "when" not "if". Keep your fingers crossed and hope
you make
>it through January expiration.
>
>Earl
>
>----- Original Message -----
>From: "John Cappello" <jvc689@xxxxxxx>
>To: <realtraders@xxxxxxxxxxxxxxx>
>Cc: <MedianLine@xxxxxxxxxxxxxxx>
>Sent: Tuesday, December 31, 2002 8:32 AM
>Subject: [RT] Uncovered Puts
>
>
>>These continue to be kind to me without any "put" to me in 6 months.
>>I have had to take on a bit more risk for this period. One aspect is
>>that I was more able to negotiate price between bid and ask, and now
>>often pay closer to the bid...having said that I just got a great
>>price for the newest S put.
>>
>>I have found a screen that really seems to be helpful. I look for
>>stocks with a beta between 0.5 and 1.0 along with a PE between 5 and
>>10 plus preferably trading in the 20's or less.Often I screen PE's
>>between 5 and 15. It seems market action has least affect on these
>>low beta as would be expected. This is what I currently have on:
>>
>>Jan '03 EXC strike price $35
>>
>>Jan '03 GE strike price $17.50
>>
>>Jan '03 ITG strike price $20
>>
>>Jan '03 JPM strike price $15
>>
>>Jan '03 KG strike price $15
>>
>>Jan '03 S strike price $15
>>
>>Feb '03 KBH strike price $30
>>
>>Feb '03 SWY strike price $17.50
>>
>>Mar '03 AHG strike price $17.50
>>
>>Apr '03 S strike price $12.50
>>
>>Now averaging between $3000 to $4000 per month on just Puts and
>>nominal commissions with flat rate from Saloman Smith Barney.
>>
>>I have studied most of the option systems offered by various vendors
>>and have not been impressed and cancelled after trial periods. If
>>anyone out there has seen anything decent in the option area, I
would
>>be interested to learn of it. The biggest problem is their exits and
>>stop losses which are difficult to obtain in the real world.
>>
>>John
>>
>>
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>>
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>>
>>
>
>
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>
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>
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