Replies to post #42240 on Mohacsy's Safe Portfolio Member Forum

[RichardTC]

The premiums on short dated out of the money puts are juicy, so that's not a bad strategy. BTW, the one issue that frightens me is consumer debt/employment. If unemployment ticks up into the double digits, expect a wave of CC defualts and a precipitous drop in consumer spending. Having said that, I think the government will do everything in their power to keep credit flowing: tax rebates, pressure on CC companies, extension of payment terms, artificially low rates, jobs programs, etc.

[Dimension]

i think it is a great strategy if you don't mind owning the stock. given the volatility in this market...even way out of money contracts are fetching a nice premium. and the poster mentions...worst case, your entry is going to be lower than where you wrote the contracts.