Posted by markwes1 on 26th of Jan 2009 at 05:39 pm
I'm with you - longer term (who knows when) I believe we head
lower. One strategy I'm pondering is covered calls with the
inverse ETFs. The call premiums are very rich.
The way I look at it, if you have a conviction that within 6
months we go either sideways or down, buy the inverse ETF and write
ATM or OTM calls. If you get called out, you make
money. If we go sideways, you should do ok. If we go
up, we have strong resistance. You can buy the calls back on
the cheap or let them devalue (increasing your value) and let the
ETF come back to you.
I'm with you - longer
strange divergences
Posted by markwes1 on 26th of Jan 2009 at 05:39 pm
I'm with you - longer term (who knows when) I believe we head lower. One strategy I'm pondering is covered calls with the inverse ETFs. The call premiums are very rich.
The way I look at it, if you have a conviction that within 6 months we go either sideways or down, buy the inverse ETF and write ATM or OTM calls. If you get called out, you make money. If we go sideways, you should do ok. If we go up, we have strong resistance. You can buy the calls back on the cheap or let them devalue (increasing your value) and let the ETF come back to you.
Thoughts?
sounds reasonable. I just know
Posted by Michael on 27th of Jan 2009 at 09:16 am
sounds reasonable. I just know nothing about writing covered calls