Apple, Silver, Ralph Lauren: Getting Burned By 'Conservative' Trades
I have sent out a pair of covered call trades to subscribers of my stock option investing newsletter that have (or appear to have) gone off quite nicely in recent weeks. As I was reviewing those, I thought about the Apple ( AAPL ) bear call spread, which backfired on me, that I wrote about on Wednesday .
You can read the details in the article, but, in a nutshell, going into that AAPL trade, I considered it a pretty conservative move. It was a bear call spread that would have been just fine had AAPL not blown the doors off of the stock market over the course of two weeks. It's probably a trade I would have only made in a simulated account, but, nevertheless, I thought the credit I received from it was money in the bank. That's a lesson learned in and of itself.
That experience got me thinking about covered calls. Most options types consider covered calls a relatively conservative strategy. Generally, I would agree, but the one thing I stress when I review prospective trades is that you should not enter a covered call, particularly a buy-write (where you buy the stock fresh alongside writing one or more calls), unless you have a bullish near- to long-term view on the stock or ETF you're dealing with.
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@ Why are women wearing a male polo logo by Ralph Lauren? design for our Polo Princess apparel
Step into the magical world of Downton Abbey with the amazing and ultra-sophisticated Ralph Lauren Fall 2012 ready-to-wear collection presented at New York Fashion Week. This year more than ever highly-acclaimed designers were mesmerized and inspired
By Rebecca Mann, Associate Editor L'Oréal Luxe Travel Retail Americas recently installed a Ralph Lauren podium at Miami International Airport. It was the brand's first such installation outside a store. “[We] tried to use it as creatively as [possible]
Fashion from the Fall 2012 collection of Ralph Lauren is modeled on Thursday, Feb. 16, 2012 in New York. Photo: Bebeto Matthews / AP Fashion from the Fall 2012 collection of Ralph Lauren is modeled on Thursday, Feb. 16, 2012 in New York.
