sometimes a bad earnings report, isn't such a bad thing

treeHamster said: Market liquidity is running really low for the period (relative to previous years). This is part of the reason you aren't seeing more long term players walking in simply because the exit is too hard to get through if an emergency were to arise.

I was expecting liquidity to rise back more from May's lows starting about 3 weeks ago but the fact it hasn't starts to tell me we won't see any long terms for a while. It's really making me miss last summer and fall, when the VIX was super high and liquidity was super good. I'm almost at the point where I'm looking to quit trading on Monday and Tuesday entirely as IV decay is super high and nobody is buying (in other words there is more downside risk in any given trade than upside risk). Kinda hoping earnings go a bit better than expected (at least for techs) so that liquidity might rise even if it's just 25%.

TJ, The analysis of puts of one vs. the other, clearly favors RIMM by the percentage return, although to be quite honest, neither of them passes my ‘worth getting out of bed for’ test. If I’m risking $5000, I want more of a return.  But this percentage return test, presupposes that both stocks are worth owning.  I’ve held INTC for more than 11 years in the current run; although I’ve bought and sold some along the way, I figure that it will possibly be a position in my estate. Can you say the same about RIMM?

Sure I know, you might be out of it next week, next month, but when I sell a put, I contemplate whether I would be willing to hold the position over time. I will admit that if there is a RIMM in 5 years, you would do better holding it than INTC, because it would only be there if it did a Lazarus act. But between you and me, I think that the odds on that are growing shorter each day, and in five years I think the stock will be in the same place as either of the Lenin/Lennon twins.

Ain’t we all, but the point isn’t whether we are up for the week or not.  I long ago came to accept that not every week, month, even year will be up (I hate when the year isn’t up and only allow that occasionally.) So the question isn’t whether there will be forward and back, only whether the forward well outweighs the back. So far clearly it does. If it didn’t, I’d say it was time to reconsider how I trade.

One of the things I’ve come to is in order to keep the wins ahead of the losses, two major things are necessary. One limit the losses. And two, make sure the wins are worthwhile. When you play for very small wins, all it takes is one good to knock out a month of wins. The losses, no matter how hard you try will snowball faster than the wins pile up. If your wins are ‘bigger’, then maybe a loss only kills two or three, maybe four wins. My wins in options is well in excess of 90%, (there’s a reason why I’m a writer, not a buyer.) Stocks I don’t do nearly as well; still better than 50% but the losses in stocks (as well as the wins) are always much bigger.