There is no 100% safe strategy. Some elaboration on Various explanation.
Both covered puts and covered calls strategies work fine when stock is moving slowly either way or sharply in direction of your trade. E.g. you bought IBM at 180 and you sell at the money 180 call for $2 . if stock is down to 179 you keep $2 and sell it again. If stock drops to 160 you're at loss and you would have to repeat selling covered calls many times again until you make up that 20 you lost on initial investment . Same way with shorting stock and selling covered puts - if stock rises quickly (e.g. a buyout announcement or special dividend) your put may get assigned and you'd have to cover your short position at loss. In case of IBM there is very little chance of this happening , although it's still possible. Look at MSFT - for years it was stable between 25 and 30 and then Balmer left and it jumped to 35 and now it's climbing again. If you short MSFT in March 2013 selling covered puts would not help you much.
Other point that Varios is kind of assuming but not explaining in details is that you sell covered puts and calls for short time - don't sell covered calls with 3 months away opex in hope to cash in huge time value. Also from my little experience, don't go over earnings reports.
you're probably confusing it with selling naked puts.
You'd sell naked puts when you expect that stock will go up . You would assume that if stock drops to your strike level that's the level you'd buy the stock anyway because you believe that stock has potential to go up. Just to give you an familiar example of EMAN stock - I sold December 5 puts for 2.40 back in July because I thought that 2.60 was a good price at that time and there was a chance that EMAN will run up to 5 by December.
Basically, you would open covered call position when you want to sell the stock and you would set your exit price for the stock that way. You can use covered calls for "stock repair" - basically to lower your base price, which is what you probably meant originally. But it only works when stock movements are small. Deep drops like IBM had are not repaired that way - if you had IBM at 180 and now you're 20 in red and you sell covered November 180 call for 0.10 ?! That's nothing . Selling 160 call gives you more money but then it will be assigned and you sell at loss. So if you decide to sell at loss then you better do it now.
Here is a dry summary :
Selling covered calls -bullish. You hope to sell at strike price
Selling naked calls - bearish. You hope stock never reach the strike price.
Selling naked puts - bullish. You hope to get into stock at the strike price.
Selling covered puts -bearish. You hope to cover the short stock at strike price.
Some quote from not too distant past (Seeking Alpha comments ) :
"HIMX & GTAT could be my only holdings after after the 3rd Friday of Jan 2015 (Option expiration)."
Gloating is bad karma, frankie.
Although I understand your laughing after the way you were treated on their MB.
Some of them had invested in GTAT before as well, that would be double whammy for some for relying on fat Silicon Valley giants.
I'd wait a few days until dust settles and downgrades put in and prolly get in - there is a place for LCoS displays even if they are inferior to ours.
Kopin has announced new "revolutionary weapon" sight system.
Not sure what is there revolutionary as it seems like it's lagging behind tracking point.
Maybe Kopin meant to say that it's weapon for revolutionaries , as they call themselves, while known to the rest of the world as terrorists. That would be a weird marketing ploy.
Looks like Golden-I is not golden anymore and Kopin is trying to get back into military business.
Does anyone remember when TheStreet rated OLED as BUY ?
Every time when someone asks Cramer about OLED (or PANL before that) he says that he needs more time to research it.
That clown should wear Kevlar 24x7 , eventually someone will hit him , he is just asking for it.
"With operations in Singapore, Germany and the United States, GLOBALFOUNDRIES is the only foundry that offers the flexibility and security of manufacturing centers spanning three continents. The company's three 300mm fabs and five 200mm fabs provide the full range of process technologies from mainstream to the leading edge."
Maybe this is what AS had in mind when he said on last CC that we don't have to produce chips in US.
As I understand, GF will have plenty of work on their hands now and most likely will honor lease agreement we had with IBM. No worries here. But it opens an opportunity for EMAN to build a second mfg facility somewhere in Singapore.
Whoever reacted on IBM news and picked some shares was lucky
IBM's drop is mostly because they backed off from $20 EPS promise, not because they sold EFK facility.
IBM is hitting multi-year low now. Are you ok there, Garce ?
C'mon old sailor.
Back Bay is not a bay for about 150 years now.
Last year quarterly earnings were on Nov 12, so don't expect any announcement until Halloween .
Play for a month with all the crazy stuff - sell Google calls , buy DIS or BA .
It looks like 3 people voted "yes" to open below 9 and only 1 optimist said "no" .
Your second sentence sounds opposite to the first one. You aren't politician, are you?
Well, I am not good at technical analysis but because of my education I tend to use graphs more than I really should. After that disclaimer , here we go
We are long term investors here , not day traders. Anything less than 3 months is not worth analyzing. If you look on 3 months or longer chart, EMAN had just strange hiccup (or rather hicc-down) . We are back where we were a month ago. Ski-jump you see on intraday chart - and with our daily volume you should know that it means nothing. a pair of lonely trades will make you whatever candlestick pattern you want.
I only use intraday charts when I already decided to put money in and I just need a to time to get extra nickel or so. Doesn't really help when you look back , to be honest. But it makes you feel good about yourself for 15 minutes
The comment from John Bissell's blog (a.k.a ace of spades , or just Acy)
"If it looks like a Recon Jet, Walks like a Recon Jet and Quacks like a Recon Jet then it is a Recon Jet with a WQVGA Kopin LCD Display in it. "
Acy is not a big fan of Kopin , AFAIK.
That's a rather strange PR. Surely, it shows that Darice IS working but it's kind of slow.
Barron 400 list is updated twice a year - third Friday in March and September.
Then if you look on the ratings there OLED was rated Buy back in 7/13 , I'd think that it would made to Barron's 400 a year ago, not this September.
It's set for 1999 , 8000 off MSPR
Doesn't say refurb or anything. just on sale.
Saw it yesterday - the picture is nice but it's was weird to look on it from the angle.
We should request some more transparency from management. Maybe they can schedule something like an ASM in E.Fishkill for people who wants to come and tour the facility. I guess any shareholder can do Maynard's trick and call in and schedule a tour but if mgmt can make a "shareholder day" it would be easier for them to prepare and easier for us.
GTAT CEO was telling all kind of things to shareholders - new manufacturing plant, earning projections in 2 years from now , some setbacks during manufacturing etc. All this looked legit (and probably was legit) up to the point when they could not deliver and had to fold. Not sure if a factory tour would help GTAT shareholders - as I understand, furnaces were built, people were hired and were making sapphire blobs. It was the fine print in the Apple contract that killed GTAT.
There are people who claim now they saw warning signs in GTAT business but many things there would definitely slip my mind as they similar to EMAN's problems - yields are not up to 10x yet, and the product recall in February was unexpected etc. I don't like the feeling of shaky ground under our business and I think scheduled factory tours could bring confidence up.