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The income sounds nice, however I don't envy your exposure to another major
leg down and I believe it is coming and coming soon (within the next 3-6
months). Many of these stocks appear to either be resuming major declines
(e.g. S) or topping out in bearish formations (e.g. EXC). The only question
on my table is "when" not "if". Keep your fingers crossed and hope you make
it through January expiration.
Earl
----- Original Message -----
From: "John Cappello" <jvc689@xxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Cc: <MedianLine@xxxxxxxxxxxxxxx>
Sent: Tuesday, December 31, 2002 8:32 AM
Subject: [RT] Uncovered Puts
>
> These continue to be kind to me without any "put" to me in 6 months.
> I have had to take on a bit more risk for this period. One aspect is
> that I was more able to negotiate price between bid and ask, and now
> often pay closer to the bid...having said that I just got a great
> price for the newest S put.
>
> I have found a screen that really seems to be helpful. I look for
> stocks with a beta between 0.5 and 1.0 along with a PE between 5 and
> 10 plus preferably trading in the 20's or less.Often I screen PE's
> between 5 and 15. It seems market action has least affect on these
> low beta as would be expected. This is what I currently have on:
>
> Jan '03 EXC strike price $35
>
> Jan '03 GE strike price $17.50
>
> Jan '03 ITG strike price $20
>
> Jan '03 JPM strike price $15
>
> Jan '03 KG strike price $15
>
> Jan '03 S strike price $15
>
> Feb '03 KBH strike price $30
>
> Feb '03 SWY strike price $17.50
>
> Mar '03 AHG strike price $17.50
>
> Apr '03 S strike price $12.50
>
> Now averaging between $3000 to $4000 per month on just Puts and
> nominal commissions with flat rate from Saloman Smith Barney.
>
> I have studied most of the option systems offered by various vendors
> and have not been impressed and cancelled after trial periods. If
> anyone out there has seen anything decent in the option area, I would
> be interested to learn of it. The biggest problem is their exits and
> stop losses which are difficult to obtain in the real world.
>
> John
>
>
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