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- 13 February 2006
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What is an example of a long term hold strategy and "working the positions"?
Are you talking about buying the dips on fundamentally strong companies?
It can be a company [stronger the better], or an ETF [which I prefer] or a commodity which I also prefer [silver/gold] where you take an initial position by selling a Put option.
Once filled [exercised] you sell a call, but you don't allow the position to be exercised unless you are selling part of the position to take profits.
Then, once you have sold part of the position through being exercised, you can sell another higher call and also, sell a put to buy a dip. Over time, your position grows and you take increasing premium.
This is a buy and hold position, you just use options to trade the position. You trade the position based on the technicals. The fundamentals dictate that you can hold indefinitely.
Over time you want the market to move both higher and lower. This works well with high dividend and rangebound stuff.
If you catch a real flyer that does nothing but go up, well at some point you close it out and start again.
jog on
duc