Anatomy of a Position
Sometimes you have to re-examine how you take a position. Although I will use Facebook (FB) in this example, the idea can be used for most stocks with an active options market or elevated implied volatility (IV). I am using FB here since it has been a position I have been trading around and also a position where I am looking at maintaining long exposure, but I want to do it as an alternative to simply holding stock.
It is important to note, and I'll probably say this three times, this is a long strategy. It does have its limits, including limiting gains and a potential to lose money. Wanting to reduce the amount of shares I held directly, I reviewed a few different approaches I would consider and narrowed it down to my two favorites, although I did have five or six that I would consider using. ...651 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.
Already a Subscriber? Please login.