Check this out, I have a friend who works for Goldman as an analyst (buy side) and we were talking last night. He always has interesting trading systems that the traders he works with pass along. He gave me one last night that I found very interesting. It's very simple.
Take REGN for example. I first bought the near month $22.50 puts for .60. Then again the next month ones for .60. Lost on both. But his idea is that if you are pretty sure you're right about the eventuality that a stock will go in whatever direction you're betting on, even if it's sometime within the year, just keep buying the next month puts or calls until eventually you'll be right. The key to this is getting a good strike price that will enable you to get at least a triple or more. Now think of it as a betting progression system you would do in blackjack or roulette. Each time you lose, just buy a few, not double, your original bet your lost. If you're a good stock picker, within a 12 month timeframe you'll get a win on that one trade and the triple or better on it will make you more than sitting in a fund all year.
Now, supposedly his guy that told him that makes millions a year doing it. Pull up a chart for almost any stock and you will see that all of them eventually fall or trade the other way. So, if you're patient, and have a good bankroll, maybe it will work.
Not my kind of trading, though.
