Post #2331 by mungofitch on the Mechanical Investing board

Investment Strategies / Mechanical Investing

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For those remembering the 99-day rule, the chances of a major drop were rather low.

To be more precise, the chances of a lasting major drop were low.
Dips shortly after highs aren't all that rare, but those specific dips are usually brief. Emphasis on "usually" : )

On dip day, Aug 5, I wrote some (a whole lot of) puts against things I wanted to own but weren't quite cheap enough for me to want to buy. I closed almost all of those today, making ~80% of the maximum possible profit in 10% of the maximum elapsed time. As it turned out I'd have done better buying the stock instead, but I'm still not happy with current valuation levels so I wouldn't have been a buyer at the dip prices. And the puts didn't actually tie up my cash so I kept earning interest on it (and on the put premium too).

Jim

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