I’m confused when you say “That is why we buy time on our short term option positions.” It sounds like a contradiction to “buy time” on “short term” options. Could you please explain what you mean? I’d like to know what you consider short term and how much time do you recommend buying?

Right now with this market we tend to view our option trades as short term trades because even though things are looking better, there is a lot of work to do and upsets can still hit the market. Since options have limited life, we view even 4 and 5 month options as short term trades, the extra time is there just to give us cushion. It is basically buying insurance even on moves we think will occur in a few days and we will exit quickly. Now most of the options we are buying are April expirations, some March, some May.