Re: LEAPS PP
Posted: Fri Jan 08, 2016 10:11 am
hi adam,
this my humble opinion... i do love the PP... however i think gold is dead i dont think it will rise again for at least 10 years... i can say that because this the variable portfolio...
i believe gold was useless around 2013... so if you took gold out your strategy i think your loses would have less.
yes you could do something simple like if spy down -10% jump in...
>Time decay really isn't as much of an issue with these as you'd think. I buy these with two years to expiration and sell them with a year left. Most of the time decay of an option occurs in the >last 6 months before expiration. Also, I like to hold the positions for over a year for tax purposes (it might be a good idea to actually do this within in an IRA to eliminate the tax issue, but I >consider money in retirement funds sacred and don't like to gamble with it).
well i should really clarify you time decay and volatility implosion.....
if you have stockcharts.com account you chart $vix... you buy when vix is under 12-12.5.... cause options will be dirt cheap then
2 things can make your options go up volatility.... and underlying price move....
so you need to factor in volatily...if i made enough gain... i am sure you watch it monthly or whatever...just cash in...
cause if volatility crashes you'd lose alot gain.
every time i bought a spy leap... (which is not too often) it usually moves like crazy when volatility moves up... you can check it with greeks... i dont want to get into a complicated options discussion...
long story short.... VOLATILITY moves LEAPS or any other long dated option.
>>I just don't believe in this in general. I don't think it works with any investment. Impossible for the average investor to time their investments.
will see just for fun.. i jumped into 3k of UBT today....leg 1.... (which is a little late according to my charting...) yes its true for avg investor its hard to use charting....
i no expert... but its been working for me... support and resistance etc....
at some point when charts look good i'll buy some UPRO 2k UPRO to match... then sell it like 5 months so experiment... for fun of course..
when i mean't leverage ETF, i meant just buying them so i didn't have to worry about expiration... the only worry was UBT low trading volume... i guess it could close up at some point if it declined far enough...
>Ideas like this sound good, but in my opinion ultimately just cap the upside of the portfolio.
It actually makes it safer... you need to understand how naked puts selling work... but its probably not something for the avg investor..
Its also not something i recommend avg investor due, you really need to study understand options before you try it...
i think keep it simple is the way to go with this strategy so i am going with UPRO and UBT.... or UPRO or buy 3x TLT.....
>Time Decay....
yeah my only problem in a normal PP spy doesn't waste away into nothing.... so u need to buy more calls in a year?.
i guess you can rebalance more frequently....
my thoughts in a long enough time period 3yrs or so...
TLT or SPY is going to up or you'll be back to even....
the only time i am buying GLD if the banks collapse again....or some major disturbance in the US financial arena....
looking in hindsight...it looks like the USA.... single handedly pulled the world out of depression... and bernake was right to all the money to get us out....
Full disclosure: i was totally wrong... i thought gold was going to go up till at least 2020.... i had the opposite view....
anyways i really like your strategy... you have balls just for even trying it!!! that goes for anyone else who tried it, i didn't read the full thread...
i trade options mostly.... then i got Mutual funds for the rest... i use charts alot too... right now i don't even look at the finance news which seems to be working for me...
that's my stock trading background...
hopefully you keep us posted monthly on your option progress... and i'll keep up the notes on the leveraged ETF use....
this should keep the variable portfolio forum interesting!!
-var
this my humble opinion... i do love the PP... however i think gold is dead i dont think it will rise again for at least 10 years... i can say that because this the variable portfolio...
i believe gold was useless around 2013... so if you took gold out your strategy i think your loses would have less.
yes you could do something simple like if spy down -10% jump in...
>Time decay really isn't as much of an issue with these as you'd think. I buy these with two years to expiration and sell them with a year left. Most of the time decay of an option occurs in the >last 6 months before expiration. Also, I like to hold the positions for over a year for tax purposes (it might be a good idea to actually do this within in an IRA to eliminate the tax issue, but I >consider money in retirement funds sacred and don't like to gamble with it).
well i should really clarify you time decay and volatility implosion.....
if you have stockcharts.com account you chart $vix... you buy when vix is under 12-12.5.... cause options will be dirt cheap then
2 things can make your options go up volatility.... and underlying price move....
so you need to factor in volatily...if i made enough gain... i am sure you watch it monthly or whatever...just cash in...
cause if volatility crashes you'd lose alot gain.
every time i bought a spy leap... (which is not too often) it usually moves like crazy when volatility moves up... you can check it with greeks... i dont want to get into a complicated options discussion...
long story short.... VOLATILITY moves LEAPS or any other long dated option.
>>I just don't believe in this in general. I don't think it works with any investment. Impossible for the average investor to time their investments.
will see just for fun.. i jumped into 3k of UBT today....leg 1.... (which is a little late according to my charting...) yes its true for avg investor its hard to use charting....
i no expert... but its been working for me... support and resistance etc....
at some point when charts look good i'll buy some UPRO 2k UPRO to match... then sell it like 5 months so experiment... for fun of course..
when i mean't leverage ETF, i meant just buying them so i didn't have to worry about expiration... the only worry was UBT low trading volume... i guess it could close up at some point if it declined far enough...
>Ideas like this sound good, but in my opinion ultimately just cap the upside of the portfolio.
It actually makes it safer... you need to understand how naked puts selling work... but its probably not something for the avg investor..
Its also not something i recommend avg investor due, you really need to study understand options before you try it...
i think keep it simple is the way to go with this strategy so i am going with UPRO and UBT.... or UPRO or buy 3x TLT.....
>Time Decay....
yeah my only problem in a normal PP spy doesn't waste away into nothing.... so u need to buy more calls in a year?.
i guess you can rebalance more frequently....
my thoughts in a long enough time period 3yrs or so...
TLT or SPY is going to up or you'll be back to even....
the only time i am buying GLD if the banks collapse again....or some major disturbance in the US financial arena....
looking in hindsight...it looks like the USA.... single handedly pulled the world out of depression... and bernake was right to all the money to get us out....
Full disclosure: i was totally wrong... i thought gold was going to go up till at least 2020.... i had the opposite view....
anyways i really like your strategy... you have balls just for even trying it!!! that goes for anyone else who tried it, i didn't read the full thread...
i trade options mostly.... then i got Mutual funds for the rest... i use charts alot too... right now i don't even look at the finance news which seems to be working for me...
that's my stock trading background...
hopefully you keep us posted monthly on your option progress... and i'll keep up the notes on the leveraged ETF use....
this should keep the variable portfolio forum interesting!!
-var