19709

Banking on Banks: Detailed Option Strangle Strategy

Tsk tsk tsk. If you don't like the market, you don't have to participate.


On Aug 26 08:15 AM apppro wrote:

> These types of trades & trading are actually what is 'STRANGLING'
> our markets and society as a whole. All this options trading has
> turned into a ponzi gambling scheme that will crash our system and
> adds NOTHING now. They say it adds liquidity - BS! If anything all
> that money being thrown about on ultra short term trades is NOT being
> invested on long-term basis.. it actually takes money OUT of the
> pool and contributes NOTHING to our economy - ever.
>
> We need to figure out a way to stop all this insanity and not come
> up with new methods on how to make it worse. I am still convinced
> that the best way is to TAX these trades as if they were gambling
> wins somewhere around 50%. That'll stop it, and even if it doesn't
> it will help pay for the mess all these trader's/traitor's insanity
> cause.

Don't Let the Banks Break You: Hedge Yourself with These 15 Option Strategies

Whether you have very little downside protection depends, or course, on whether you're writing I-T-M or out-of-the-money calls. If you're called out of stocks you like, you can always buy them back and write additional calls.


On Jun 24 12:51 PM kjangelo wrote:

> selling covered calls is a good income strategy when the stocks stay
> the same or go down slightly , however it weeds out all your winning
> stocks and potentially leaves you with the losers. Also it leaves
> you with very little downside protection.

Don't Let the Banks Break You: Hedge Yourself with These 15 Option Strategies

Actually, Marco suggests I-T-M options on a regular basis where the probability of being called is certainly higher and his projected profitability numbers are consequently more likely.


On Jun 24 10:31 AM LanceLink wrote:

> Bernie --
>
> Here are the problems with this, and other articles that Marco writes:
>
>
> First, he bases his "return" on the possibility that the stock will
> be assigned. This is just based upon the hope that the stock will
> rise to the higher strike price. Basing your returns "if assigned"
> is a shaky strategy.
>
> Second, he keeps listing a column of numbers that he says is the
> "current probability" that the stock will reach that strike price.
> He does not explain the basis for that calculation in this article,
> nor has he ever explained it (I've checked his blog, it's not there
> either). Yes, Marco, I understand that there may be some extrapolation
> you can make from the option price and the volatility, etc. about
> the chances that a stock may reach a certain price, but it's all
> just hope.
>
> Writing calls is a solid strategy for income, but articles like this
> are not particularly useful.
>
> Write ATM for maximum return and protection.

Don't Let the Banks Break You: Hedge Yourself with These 15 Option Strategies

Selling covered calls is a viable way to gain downside protection on stocks you already own while enhancing your dividend yield.


On Jun 24 06:54 AM apppro wrote:

> Don't let these guys fool you either. Options may work, but not for
> 98% of us. Actually we're all suffering this added volitility just
> so a few option traders can make a couple of extra $.
> Stop the insanity! Even as Warren Buffett said the other day:
> "Make it simple!"

Rating the Top 12 U.S. Banks - From Hidden Gems to Zombies

Helplessobserver
BBT just increased its dividend. I believe it has a track record of doing so on a quarterly basis for the last 35 years with a resultant compound dividend growth of > 10%.