Tag Archive for calls

Sterling Market Commentary for Thursday March 8th, 2012

In looking at the charts from Wednesday’s trading the trend of the market remains weak, however yesterday’s big bounce tends to pull stocks and indices that recently broke below support back above those support levels. What this really ends up doing in my opinion is that it greatly reduces the number of potential trading candidates for the day. It also tends to throw the continuation of any downtrend in doubt.

With the volatility we have seen in the market over the last several years I have adopted my strategy from one of being a purely short term, day trader to one of selling covered puts and calls. This results in my building a portfolio of covered puts and calls over the course of a month that then reverts back to cash on options expiration. During this process I generally try to build a portfolio that is a mixture of long and short positions. I am looking for today to be a day where I can balance out my put positions with a call position that will not get stopped out prior to expiration.