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Trade Findings and Adjustments 03-10-2022
Why was yesterday the day:
Because it was an up day – One day a trend doesn’t make
I believe you were guessing for the rebound
What are you rules for Long Puts – CAN’T they change all the time
What do long puts protect?
Stock YES but they also can protect a portfolio, protect thru earnings, protect during downturns, protect a leap long call portfolio
Here at HI we use long puts for earnings (two weeks before and 4 week after= 80%+ a stock could lose 10% or more)
We also add long puts during index technical crossovers
Profits of long puts we always try to convert into more stock ownership
Take a profit and add shares at what is expected to be support and/or a potential bottom
Take a NET profit if long puts are protective puts with stock ownership
USE profits for more shares of stock = Dollar cost average without having to go find more money
DON”T think you can time the market
The ONLY SMA 50, 200 = INSTITUTIONAL TRADERS MAKE THEIR DECISIONS FROM
As we reset puts form Feb 25 options expiration we are now back to making 60-90% of the downward movement
We will not take puts off until after the March 16th FOMC rate decision = +0.25 increase
Opportunities add more long puts as individual stocks break long term support levels
Looking a little farther adding more shares of stock with all the profits we’ve been booking Since Jan
We have added BAC, UAA, F, FB
We still have cash on the sidelines for AAPL, BA, BAC, BIDU, DIS, F, UAA, V, JPM,
Our long puts are usually ATM or slightly ITM = Delta that with two strikes of movement we can make up at least 70% of the downside movement
YES there are times when the puts are making so much up on the way down we keep them until the day of expiration
YES I think the stock market is going to over-react to a rate hike EVEN though we have known for two plus years that it was needed to tame inflation
Stay hedged is out theme for the first quarter
