fit--bend it like buffett (and the future of value investing)
cash secured puts for those unaware you put the full capital up for the position up front in case of being assigned and take a premium in exchange. think about it its almost exactly the same as a limit order, except youre being paid for the Time.
in some cases limits never fill, hence where this strategy is extremely useful when entering positions.
the cases that you dont get assigned/enter the position you get paid for the time you waited. for those worried on assignment risk, the premium received will reduce the cost basis of the position. that being said what ive been doing has been selling a $6p on a rolling basis.
when assigned i plan on implementing a covered call strategy. fit has a great BETA, sharefloat, sales, inventory turnover and intangible name.
creating a margin of saftey through appropriate risk analysis plus taking advantage of the volatility profile is the new era of value investing
in some cases limits never fill, hence where this strategy is extremely useful when entering positions.
the cases that you dont get assigned/enter the position you get paid for the time you waited. for those worried on assignment risk, the premium received will reduce the cost basis of the position. that being said what ive been doing has been selling a $6p on a rolling basis.
when assigned i plan on implementing a covered call strategy. fit has a great BETA, sharefloat, sales, inventory turnover and intangible name.
creating a margin of saftey through appropriate risk analysis plus taking advantage of the volatility profile is the new era of value investing
Comment:
This is also a great way to reduce drawdown risk which is a big flaw to most CAPM models most are taught