umbolox

Hi, 1a2b3cppp I am using this simple no-margin strategy too. And it let me sleep during the nights. I just want to add four issues I have learned during these years, from an-ever long italian master position trader whose nick is arseniolupin. Maybe these four can improve your trading skills. I hope so, we are all here to learn and share knowledge. First: Don't use fixed lots, but fixed money (at least). Let's assume you buy XLF at 18, then keep pyramiding at 17, then 16, then 15 and so on. You have of course money to let it go to zero (however impossible). You would not buy the same quantity at each level, but maybe the same total dollar amount, as the average price will go in your favor. Or maybe you can slightly increase the dollar amount as the price goes against you. Second: consider each trade as a separate one and use the valuation method known as LIFO (last in, first out). Average cost price is just an "illusion". In the example above, let's assume XLF drops to 12, you have an average cost of 14.73. People think that if the market doesn't reach 14.73, and they sell one shot at 13, they have a loss. WRONG. You earned 1 (from 12 to 13), and with this gain you can reduce the average cost of the position. Then you wait for 12 again and you buy it. Then if it goes to 13 you sell, and that 1 gain also reduces the average cost of the entire position. So on, until your average cost is reached. Third: you can sell covered calls, but you can also double them at slight credit (CBOE's stock repair strategy). Assume you have bought XLF at 18, now it is trading at 17. You can sell two ATM call strike 17 and buy a 16 ITM call at slight credit. Price goes up, ok. Price goes down, you have the credit, price remains flat, best situation. Fourth: use distant put backspread with ETFs for black swans (this is my favorite). Sell a september 2013 put strike 18, and buy 10 strike 12 at no cost. I did one with EWJ (japan), sell 1 ATM put sept strike 12, bought 28 puts strike 9 at no cost. You have three scenarios: 1. price goes up: nothing happens 2. price crashes: you are rich with this position, and the other positions (i.e. SPY) are completely hedged 3. price slowly reach your worst case scenario with no vega (XLF at 12, EWJ at 9): you are assigned. You take one lot of ETF. No problem. You can average, you can sell an atm put or you can make another put backspread if you believe in black swans Ok i finished cheers from italy

Hi guys this is UmboloX writing from Milan i trade eurex derivatives and italian stock derivatives i'm new here, looking around for something nasty to learn... :missy: happy trading