THE TPC REPORT
18 August 2009 by Cullen Roche
6 Comments
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Comments
Lovin it… very great stuff!
TPC,
Thanks for the report. I have one question. How does one hedge with the option market? I know it’s an elementary question. Perhaps there are reading material elsewhere that I can read up on.
Start here: http://www.investopedia.com/articles/basics/03/080103.asp
Then these two:
http://www.cboe.com/LearnCenter/pdf/understanding.pdf
http://stocks.about.com/od/advancedtrading/a/OptionBa022705.htm
I pretty much agree except with the covered calls. If anything, you should write covered calls and then buy puts with the premium, or just outright buy puts. Covered calls aren’t great hedging instruments unless the security stays flat to slightly down.
oil and material stocks make up 25% of the S&P 500?
really. i see energy at 11.8%. materials 3.4%. what am i missing?
Industrial materials….same thing by most people’s standards. 12 of one, half dozen of the other. I should have been more specific. Check this breakdown: http://finance.yahoo.com/q/hl?s=SPY