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#2
03-30-2009, 05:59 PM
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 Re: Using options to protect positions in IRA?? Shhhh wrote: - quote - > I have a rather sizable position in several mutual funds in my IRA.
I'll answer as if you owned gold, and not a fund.> Some of the commodity funds have had nice moves already this year for > example TGLDX (is a gold fund). > I don't want to sell this position because I feel Gold may still have > some upside, however I don't like all the risk I'm taking on the > downside at the moment. What strategies can I use to protect my mutual > fund positions?? Protective puts are a strange thing for this purpose. With volatility so high, the Jan 2010 at the money put will cost you $12.60 (for the $91 strike) on GLD which is $90.10 as I write this. So this insurance costs you 14% (ignoring the dollar mismatch) for just about 9 months of protection. On the other hand, as Ron suggested, you can sell the $90 call for about $12, but lose any potential gain beyond that. It's tough to have it both ways. |
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#1
03-29-2009, 07:30 PM
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| Re: Using options to protect positions in IRA?? On Mar 29, 5:50*am, Shhhh <trumpet1...[at]comcast.net> wrote: - quote - > I have a rather sizable position in several mutual funds in my IRA.
TGLDX has some corporate risk in addition to the price of gold risk.> Some of the commodity funds have had nice moves already this year for > example TGLDX (is a gold fund). > I don't want to sell this position because I feel Gold may still have > some upside, however I don't like all the risk I'm taking on the > downside at the moment. What strategies can I use to protect my mutual > fund positions?? Sell TGLDX and buy GLD, you will then be able to sell calls against GLD which you can't do against TGLDX. -- Ron |
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03-29-2009, 11:30 AM
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| Re: Using options to protect positions in IRA?? Shhhh <trumpet1120[at]comcast.net> writes: - quote - > Hello all,
One approach would be to buy the appropriate puts in the IRA. Brokers> I have a rather sizable position in several mutual funds in my IRA. > Some of the commodity funds have had nice moves already this year for > example TGLDX (is a gold fund). > I don't want to sell this position because I feel Gold may still have > some upside, however I don't like all the risk I'm taking on the > downside at the moment. What strategies can I use to protect my mutual > fund positions?? will let you sell covered calls and buy puts and calls in IRAs. -- Rich Carreiro rlc-news[at]rlcarr.com |
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#-1
03-29-2009, 10:50 AM
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| Using options to protect positions in IRA?? Hello all, I have a rather sizable position in several mutual funds in my IRA. Some of the commodity funds have had nice moves already this year for example TGLDX (is a gold fund). I don't want to sell this position because I feel Gold may still have some upside, however I don't like all the risk I'm taking on the downside at the moment. What strategies can I use to protect my mutual fund positions?? Thank you all |
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