Friday, June 3, 2011


With the market down 5% in the current correction, 16 of the 18 positions in my accounts are still above water - thanks to the previous bull market. Since DITM is a defensive, fixed income-type strategy, it is getting maximum return at these levels. With even the best fundamental analysts predicting higher levels by yearend, a huge Bear market is not expected - no matter how bad the US and global economies are.
Since this is an optimal time to enter DITM - lower stock prices, higher dividend %, higher option volatility (prices) - I have entered the following positions as mentioned in the last post:
5/31/2011 DIA put 1 Aug.122 250
DIA capture best months: Aug., Nov.,Dec.(spec.)& Jan., May,
6/1/2011 INTC 3 Jul .21 $64
6/1/2011 LLY 2 Jul.37 66
6/1/2011 XLU 2 Jun.33 36
6/1/2011 HCN 1 Jul.50 30
6/3/2011 TAL 2 Jul.30 150
These are good DITM candidates which are not going ex-Dividend for awhile, so I hope to collect put premium (right hand column), but more importantly do the buy/write with a lower stock price, by having the put expire just before the next ex-D date (or just keep the money if still out-of-the-money)-then do the buy/write.

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