Monday, April 15, 2013

T G I ditm

Veteran traders remember TW3 ( That Was The Week That Was) - what a way to start the end of Tax Season: First Gold tanks , after a steady drop from late last year; then the stock market tanks after a steady and boring rise. And, of course, capped off with the terrible tragedy in Boston!

Finally the frustration of lagging the huge Bull Run with most of AUM paid off with the Safety Net of DITM today. Of all my 20-something positions, only 4 went "under water", since the Bull's pushing stocks way  up above the Call-Away strike price. Only the Oil stocks - PWE, ERF, QRE, and, of course the recent  NEM buy are "temporarily?" under water, but still paying a nice dividend and milking option premium.

Although constant monitoring is required, this could be  a great buying opp. Since by being pretty much fully invested and rolling out calls has kept DITM activity in the blog dormant, I thought I'd incorporate some results from my new LEAP strategy as well.
In my column,

which I titled Leap Into the Future, I discussed a few $5 to 10 stocks - not recommendations, but examples. With gold down bigtime, I'm now looking at IAG and KGC to capture huge premiums. More risky stocks would be HL, HEK ( a water play), NOK. With only 7 quarters left until January 2015, annualized returns are substantial, and losses minimal - even if they disappear entirely (unlikely). If they don't rally, another set of 2-year Leaps could cover the entire cost of the stocks, especially with dividends rising.

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