Could you not buy puts or go short for NVLS if you don't already have a position? (March 6, 2002)

  Last night we were looking at NVLS as a covered call candidate on the Daily as a stock we had previously taken positions on and was ripe for a pullback. We know that stocks will inevitably pullback no matter how strong they are, and if we are going to hold onto the stock during the pullback, we can sell some calls on it, let it fall, and then buy them back when it hits support and starts to rebound.

That is the same theory of puts or going short: the stock is going to fall. That can be played with puts or short selling as well. The usual precautions apply: is there enough room on the fall down to support to cover the spread and give us a safe enough return?

Previous Page Next Page

Return to Table of Contents

Legal Disclaimer