Comments on: Shorting a Stock: A Viable Bear-Market Strategy? https://www.thebluecollarinvestor.com/shorting-a-stock-a-viable-bear-market-strategy/ Learn how to invest by selling stock options. Sat, 27 Jan 2018 04:41:09 +0000 hourly 1 By: Justin P. https://www.thebluecollarinvestor.com/shorting-a-stock-a-viable-bear-market-strategy/#comment-146643 Sat, 27 Jan 2018 04:41:09 +0000 http://www.thebluecollarinvestor.com/?p=16233#comment-146643 In reply to roni.

You’ve done well there Jay! AMGN finally breaking out after about three years too I see.

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By: Jay https://www.thebluecollarinvestor.com/shorting-a-stock-a-viable-bear-market-strategy/#comment-146624 Fri, 26 Jan 2018 22:40:18 +0000 http://www.thebluecollarinvestor.com/?p=16233#comment-146624 In reply to roni.

Hey Justin,

I have had success with BA, HD, AMGN and CAT all in different sectors but I only over write half of them since premium is so low in this VIX environment and I prefer to just let them run free. – Jay

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By: Justin P. https://www.thebluecollarinvestor.com/shorting-a-stock-a-viable-bear-market-strategy/#comment-146623 Fri, 26 Jan 2018 22:24:01 +0000 http://www.thebluecollarinvestor.com/?p=16233#comment-146623 In reply to roni.

Which blue chips do you like for the long term Jay? I’ve stayed out of CC’s this earning’s period so far myself since I haven’t found much I like so far.

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By: roni https://www.thebluecollarinvestor.com/shorting-a-stock-a-viable-bear-market-strategy/#comment-146621 Fri, 26 Jan 2018 21:26:28 +0000 http://www.thebluecollarinvestor.com/?p=16233#comment-146621 In reply to roni.

Hi Jay,

so true, I do have low risk tollerance.
But at the same time, I do not want to invest my cash for less than 2% ROO.
The Blue Chips and ETFs will not pay enough and therefore, as you say, I do set myself up for frustration, and it hurts when it happens.

But, by using the BCI methodology, which recommends diversification, I feel safe enough to make consistent low risk trades each month.

Also, I select most of my trades from the weekly run list, and manage them daily with Alan’s recommended exit strategies.

So, you see, I am not so risk averse as I sound 🙂

Roni

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By: Jay https://www.thebluecollarinvestor.com/shorting-a-stock-a-viable-bear-market-strategy/#comment-146616 Fri, 26 Jan 2018 19:56:53 +0000 http://www.thebluecollarinvestor.com/?p=16233#comment-146616 In reply to roni.

Dear Roni,

In the past you have shared with us you are a risk averse investor. I suspect many of us can relate with that!

I suggest you consider ETF’s and Blue Chips. The premium is lower but so is the volatility. When you use growth stocks for covered call writing, in my opinion only, you could be setting yourself up for frustration. You will never capture the full up side but you will always feel much of the down side :)! – Jay

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By: roni https://www.thebluecollarinvestor.com/shorting-a-stock-a-viable-bear-market-strategy/#comment-146614 Fri, 26 Jan 2018 19:23:12 +0000 http://www.thebluecollarinvestor.com/?p=16233#comment-146614 In reply to MarioG.

Hi Mario,

this option cycle is really strange. I beleive that the Goverment shut Down, plus the ER season is what caused this.
I did enter CRM, ADBE, and DLTR trades this week at NTM 2% ROO.

I am still 45% in cash, and also got some bad choices working against me. I had to unwind ULTA with a 5% loss last Wednesday, and have just bought back 5 WGO calls at 13% of the original premium, and I am not sure what to do with the underlying shares, which have lost 17% in the last 2 days, and still going down as I write.
I have no idea what is going on with WGO.

Roni

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By: Jay https://www.thebluecollarinvestor.com/shorting-a-stock-a-viable-bear-market-strategy/#comment-146610 Fri, 26 Jan 2018 16:15:50 +0000 http://www.thebluecollarinvestor.com/?p=16233#comment-146610 Good morning Mario,

That is very interesting about how the two different brokers handled a trade unwind. A long time ago when I was at Merrill Lynch for a brief period I made a mistake on a client’s order and it practically took an act of Congress to undo it :)! I felt like I had been sent to the Principal’s office sitting there trying to explain my screw up to the Branch Vice President! The on line world is much easier today.

It’s probably just me and everyone does it differently but I would not hesitate to hold a V or a CSCO through earnings reports. I would use the weeklies to hop scotch the date just like ex-div dates and never be covered on those days. But holding them, to me, seems reasonable. Any given report is a coin toss. If fundamentals change that’s different. If not over a longer investing time horizon I suspect reports even out. – Jay

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