If you have been selling some covered calls as the market rose, today is a good day to look to buy them back cheap.  E.g., sold CYQJX on 9/10 @ 1.04 bought back this morning @ .64   I usually look for even a larger gain after two weeks (perhaps 50-60%) but the option has another month to run and CSCO is too volatile to wait and see it move against me.

I’m kind of curious OF, you say you are all naked puts and I’m all in CC’s.  I take it that you like I would prefer to have a mix, if possible.  For the last month, I haven’t been able to sell a naked put although I’ve carried offers in both TEVA, AOB and KFT.  In fact, except for a SEP 40p in JPM sold on 8/28, I haven’t sold a put since 7/8 when I sold a GE Aug 12 (I know I should have just bought some more outright.)

Sometimes I feel like a mountebank with a table set up in the square and you can show the rubes how the game is played and they still fall for it, over and over.  Anyway, any thoughts on how are portfolios could have gotten to these two extremes.

Selling covered calls and/or bull spreads are two of my major strategies. CC's can be a little painful if the stock is rising quickly so one has to be pretty nimble about when to roll up, buy back, or simply let them ride all the way to expry, especially when they are close to the strike. FWIW I've rolled my LVS covers many times, but have insisted on keeping them through Sept, as I've been expecting a dramatic pullback. That said, like yourself I bot them back yesterday (could have made a bit more if I had waited another hour or so) but still I was looking at the biggest gain I'd seen to date so decided to lock it in above my target, which it did eventually hit. (sold @1.18, bot back @ .45. On the other hand for the better, I resisted the impulse to buy after the first waves of selling & held out till the third drop. The stock is up today (9/25) so for the moment I'm happy about that particular trade but you know it ain't over till its over. The meters still running and hindsight has a funny way of incubating re-evaluations.
Anyhow its always interesting to see how others play things.

Spence Oh Rama

Hi sp
thanks for the post, Actually made me laugh because your post to me is somewhat akin to a message I gave to someone else yesterday. Sorry if I gave the impression of stressing. What I was trying to say was a little bit the opposite, which is that I made a similar trade yesterday that looks good today, but its really too soon to make a verdict. Like most trades it could have been possible to squeeze a few more dollars or it could have been a lot worse. All qualitative judgments are locked into the moment but I can't count the number of trades that in hindsight reversed to their opposite later for better or worse. i.e. you can't stress too much cause you never can tell. Not so very long ago I bought Bear-Sterns around 100 with the idea of making it a long term hold but eventually sold around 120 on hearing whiffs of investigations for some minor impropriety. Didn't look so good later as it soared but seeing as how it eventually closed for a dime a share, I guess it turned out pretty darn well.

That said as things unfold I try to evaluate every trade I make in terms of my timing, strategy and rational for action or inaction. As you know all too well options are very volatile. Balance and perspective are essential but it's also my job to keep improving my performance, avoid repeated mistakes and lessen the effect of false signals, shallow thinking and the pitfalls of under or over trading.

Obviously the more volume you do the less individual trades matter (except for the really big momentous ones) but as a matter of choice I now make a lot less trades than I used to, so each one tends to impact the bottom line pretty fast. On the other hand maybe you're watching yourself closer than you think or I'm monitoring myself too little cause I have no idea how many trades I've made in options or stocks and though I always calculate the gain/loss of particular trades I rarely, if ever sit down to figure out the cumulative effect of my covers per underlying stock. your 16% is pretty darn specific. I just break down my stuff to a few basic ranges: loss, break even, small gain,  20% or more, 40-50+, near 100 or over, and multiples of 100%, beyond that I just keep tabs on whether its been a good or bad month.

As for crystals, be they clear, clouded or opaque, after the dot.com bust, 9/11, a few wars, galactic-sized frauds like Enron etc., the bank-housing collapse, and this last Nov-March's freefall, it's notable that anyone has any kind of balls left at all.

Spencorama: I saw your recent forum post on covered calls and had a few thoughts in response. I just wrote an All-Stars blog post that may be interesting to you:

http://community.tradeking.com/members/tk-all-star/blogs/44463-covered-calls-and-stampeding-bulls

If you have any followup questions, I’d be glad to hear from you.

Regards,

Mark Wolfinger

Founder, MDW Options

TradeKing All-Star Commentator

Computers like humans make mistakes. I have noticed that if a TK staff posts to a thread, the thread moves to the top but the actual post might take 45 - 60 minutes to propagate to the client-facing (this is us) side

Obviously since Wolfy's comment 'miraculously' appeared after OF and mine were posted, I just we discovered a 'communist conspiracy'.  Gee, do you think they get 45 minutes to sneak orders in after earnings announcements?

YP, let me be sure you realize that I was typing with my tongue stuck firmly in my cheek;  however, I don't know if the 'in house delay' is do to compliance issues or to allow the writer some editorial discretion.  TK, said awhile ago that they do not allow us to edit our writing once published, for two reasons.  First, they are obligated to keep copies of everything published on the site, and second, people could change their writing to suit future circumstances (making them look smarter.)  I find the first rational weak since it just seems to warrant computer space.  And the second doesn't hold water, because I think that the bulk of the people who read this dross are repeat offenders, and pretty much have figured out who's worth reading and who is not.  When I have time I write off line in Word, and reread before I copy and paste.  Many times that alone saves me from unintelligibility, but some times I just read what I think I wrote, and don't catch the mistake until later.