The market has had some serious mood swings lately. The key to making money in this volatile market is patience. As the market swings from low to high we are picking our spots. We look for good companies that can provide us at least a 2% swing for the month. Here is the strategy, pickup stocks on the downswing and as soon as you get an upside profit you sell a short term call at the money. Here’s how it works. If you bought PFE at $30.20 and took it to $30.50 that is close to 1% and sell a call at $30.50 for another 1%. By selling the call at the money it will deteriorate if the stock moves down, thus protecting your downside, and if it moves up and is called away “SUCCESS”.
Before investing of any kind consult your financial advisor. Options are not suitable for all investors and people can and do lose money. By the way PFE was purchase last week by our Sensei.