Capital preservation - what is your strategy?

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    Posted: 24 September 2010 08:58 PM #16

    the good thing about selling OTM calls, as they get closer to in the money you can just roll out (to a further month) or up (to a higher strike) or both. So you buy to close for a loss but immediately sell to open a new covered call to replace and depending on how you roll it you may be taking in more premium, possibly enough to cover the loss. Normally not near as much protection as just buying a put (or put spread) but if employed wisely probably more profitable in the long term…..unless you have expert timing on both opening and closing the put, and or we have another big crash.