If this market hasn't convinced you that buy and hold is a gamble - I don't know what will.
Holding any stock for more than a day has been a sure recipe for heartache (sometimes just an hour will do it) but we have been having a good time at PSW, during our member sessions, bottom fishing and concentrating on plays that give us much better prices than the ones paid by the average retail investor using very basic option strategies. This strategy, which we call a "buy/write", as we buy the stock and write options against it, is one of our most effective tools for dealing with a choppy market.
There are, of course, many, many stocks trading near multi-year lows and it's still important to select ones that have strong underlying fundamentals that we actually don't mind holding long-term but, as long as you are willing to own 200 shares of a stock - this system can reliably give you a 10-20% discount off the current market price. It's simple, easy to follow and is ideal for trading in a volatile market.
Of course when we buy any stock or long-term option position, we should be scaling in. In other words - we don't assume our timing is perfect and we enter a position in stages. In our Strategy Section I discuss the 20% entries and the various rules for that so I won't get into it here but, effectively, selling puts and calls against a stock entry is a way of automatically following the scaling system without having to monitor your position that closely. I will give a few examples here and, if you sign up for our newsletter service, PSW REPORTS, using this link, we will be waiving the fee during a trial period and there will be follow-up trades each week through June options expiration (19th).
