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10 comments:
My god Roger.. You're pimping porn sites like gummy.com now? Shameless! Doing this while your wife is in the other room as well.
i'm sorry is this supposed to be a humor attempt? are you the same guy in Illinois who thinks I'm fat, a tool and other pleasantries?
I have no idea about the site you mentioned but if it is porn site I am not shockced you know about it.
Dear anonymouse in Illinois:
Meet me at the pre-arranged place. Remember to bring cash. Small bills. Make sure that you aren’t followed and come alone and unarmed. No cops either. If you do exactly as you are told, I will release your brain to you unharmed. Remember, if you ever want to see your brain alive again, no tricks. Got it?
I operate from a underground bunker with my brain fully secured and guarded.. Anon is just pushing out propoganda to kiss up to Random Dumbo. Roger I really do hope that Bin Laden lets you go soon.. You're becoming delusional and desperate now pimping out porn sites for side cash. Paaathetic!
yet, here you are daily, anaonymousey. Still hearing those "voices"?
Selling puts are closely related to selling covered calls.
My latest actual trades closed 12/15/06
sold 10 options Dell Dec 25 put on 11/16/06 for a net of $1024 after fees. Price of stock=26.53 on 12/15/06.
return=1024-0/0= infinity
sold 20 options NFLD Dec 10 puts on 12/11/06 for a net of $726 after fees. Price of stock=$14.79 on 12/15/06
return=726-0/0=infinity.
Seriously, I should base my returns on return on the underlying stock option prices.
Dell=1024/25000=4%
NFLD= 726/20000=3.6%
Like any schemes this naked put selling may work for somebody but not for everyone. Unless you understand volatility and probablility you should be very careful about doing this kind of trades. Many brokerage firms lets you write naked puts if you have sufficient cash to cover in case the stocks are being "put" to you.
Back to covered calls. In the late 90's I attended one of the "wade cook" road shows. The only thing that attracted me was the idea of covered calls. I created a program that used a file of ticker symbols based on the S&P600 plus a few and went to CBOE and pulled all the current month options and the following month options. Massaged it all and put it in a CSV format file to be used in EXCEL. The massaging was looking at things like if I was called out, if I was not called out and the stock stayed the same and if I was not called out and the stock went down some what were my returns. I usually did this on Friday night and took the weekend to do all my research for a Monday morning opening. I was doing this with just a small part of my portfolio. If my memory serves me right I was aiming at buying the stock, selling the calls and getting called out and taking about a 5% gain. I believe I did it for about two year before my health changed and I could not devote the time. I am thinking of maybe trying to create a new program and see if it would still work.
Good info and interesting discussion on covered calls and their role in a portfolio. I'd like to hear more about this.
I also appreciate getting a reading from your debunkometer. Thanks Roger.
Models for this week:
Timing Model = 1.0
70% long 30% cash
Allocation of long positions:
MSCI EAFE Index 40%
MCCI Emerging Markets Index 30%
Russell 3000 Index - U.S. 30%
Top U.S. Sector ranks:
U.S. Telecommunications 4.5
U.S. Real Estate 4.0
Small Cap Value 3.0
U.S. Oil Equipment, Services & Distribution 3.0
U.S. Oil & Gas 3.0
U.S. Financials 2.5
Top International ETFs
MSCI Spain Index Fund 3
MSCI Mexico Index Fund 3
MSCI Singapore Index Fund 3
MSCI Sweden Index Fund 3
FTSE/Xinhua China 25 Index Fund 3
S&P Latin America 40 Index Fund 3
MSCI Malaysia Index Fund 3
MSCI Austria Index Fund 3
MSCI Emerging Markets Index Fund 3
MSCI Brazil Index Fund 3
Top Asset classes
S&P Latin America 40 Index 4.0
FTSE/Xinhua China 25 Index 4.0
MSCI European Monetary Union Index 4.0
MSCI Emerging Markets Index 3.0
MSCI Pacific Free ex-Japan Index 3.0
MSCI Hong Kong Index 3.0
Dow Jones Wilshire REIT Index 2.0
S&P Europe 350 Index 2.0
One of the 4 sentiment models jiggered just enough this week to force the timing model back up to a 70% long position. I don't view this as very significant - I believe risk is no lower now than last week. But what I believe doesn't really matter...I'm a slave to my models :-)
Emerging Markets finally took a breather last week and there was just enough evidence to suggest EAFE was gaining the relative strength to warrant a small change in global allocation.
In going through my US sector model I noticed a number of sectors exhibiting short term overbought behavior. I give this a small weighting to take the edge off of short term momentum readings. You can use the link below and these symbols as replacements to look at a number of these sectors vs. 15 and 30 day TRIX. These are top performers over the past 30 and 90 days.
$DJUSOG
$DJINET
$RUO
$DJUSBM
$DJUSTC
$DJUSCY
$DJUSWC
http://stockcharts.com/h-sc/ui?s=$DJUSRE&p=D&yr=3&mn=0&dy=0&id=p02361926406
Nice to hear some sensible comment about covered calls. It's not what many folks like to hear, but there you go.
Cheers
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