Replies to post #26066 on Zeev's Turnips Patch-No Politics (ZEEV)

[jdaasoc]

If your only permanent holdings are tax free bonds, the risk is very high on naked options but in my twisted mind is a balanced risk approach since the options are the only investment with risk that I own for ST trading. <g>

I always try if market isn't under so much downwards pressure to hedge with both short PUTs and CALLs to cover 80% of a stocks ST movements of up to 10% in stock's price.
Right now I am almost devoid of short PUTs so my only risk is big sustainable rally which is not in cards IMO. I cut my teeth and learned alot about short options trading both good and bad profitswise during the bubble period with stocks like RMBS where Beta's were sky high.

Right now as long as they keep giving me good premiums on short calls from all those betting that recovery is just right around the corner, I will keep trading short options. I have to calulate very accurate cash requirements for each position in my head to make sure my account does not get out of wack. No broker is of any assistance it this regard.

I would like to just be able to write short PUTs on very conservative stocks assuming pocketing small sums but as long as market is as volitile as it is this is working stratgy.

I think the most risky investment is to be long equities like CCMP or QLGC that are just trading vechiles and could end up with bottom falling out price decreases like the 52 W low stocks IRF ADPT BRCM and BRCD.