With the market falling and volatilities expanding, I was selling puts today on stocks/securities. Yes, I am a contrarian! I sold puts on my safety securities that I wish would fall enough so that I could buy them. These are not speculations, I sold a series of puts on things that have real value and little chance of falling apart. The one thing all three of these instruments have in common is that they are basically pools of fixed income assets.
Annaly Capital (NLY – $14.04)
Sold Jan 2010 $12.50 puts (-YVTMV) at $1.40
Sold Jan 2009 $12.50 puts (-OQYMV) at $1.00
IShares Lehman TIPS ETF (TIP – $97.97)
Sold Sept. $98.00 puts (-TIPUT ) at $0.55
Centerplate Inc (CVP – $16.83)
Sold Jan 2008 $15.0 puts (-CVPMC) at $0.70
Disclosure: I own NLY. I just bought more yesterday. I own the exchange traded fund TIP. I also own TIPS (Treasury Inflation Protected Securities) directly in my IRA. I own CVP. I went to a Royals game in Kansas City recently and bought a beer at a Centerplate-managed concession stand and drank it out of a Centerplate plastic cup. I own enough T-Bills to cover ever put if exercised (assigned) against me.
Don't Try this at home disclaimer: I am an expert and options may be for me but they are probably not for you. You can lose way more than your entire investment playing in options. If you play too much in options you can even lose your home, and everything you own. Now who would that be good for?