jcianci

The 'Preferred' Way to Play Financials

yes i agree with PFF as a highly speculative investment if you need exposure to this sector, but you also need to hedge. Like the XLF example mentioned above, you can just as easily lose 50% in PFF. Hedge by selling covered calls. The July 21 calls offer a >10% premium at current price (20.50 as of 2/26 9:45AM). This will reduce your cost 10%, collect another dividend (if not called) and if called, a 10% return in the books. Yes your capital gain upside is limited but in this market mitigating risk should "bear" fruit...