Andrei, I just mentioned options here as an alternative suggestion to cash for staying "psychologically" involved in the market action with very little capital at risk.Originally Posted by Andrei
As for my investing style, I like options for CANSLIM-type trades on individual stocks where I can fix in advance my maximal potential loss on any trade to the premium paid. This practice allows me to stay totally focused on my leveraged ETF trades, since any damage control distraction on stocks ( such as after a big gap down) never bothers me.
Now with the GDX robot and in the absence of liquid related leveraged ETFs, I plan to leverage my positions with options too, limiting premiums paid to the percentage away from the trailing stop loss.
Maybe once or twice a year I see clearly some huge window of opportunity in something and I trade options to increase my leverage well above the usual three-times leveraged level.
I am not an options expert at all and sophisticated options strategies are not my cup of tea. I like to keep it most simple, buying puts or calls at the money with more than one month to expiration.
Thanassis, our technical wizzard administrator, is a real expert in sophisticated options trading and I hope he will soon be able to post about it once he has finished with the fine-tuning of the new website and the real-time 20 DMF tool.
Billy
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