Author Topic: How to best take advantage of a bear market?  (Read 1165 times)

bwall

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How to best take advantage of a bear market?
« on: December 17, 2018, 02:05:11 PM »
Last Friday (the 14th) for example, I wrote out of the money front month covered calls (expiry Dec. 21). Total income $800.

So when the market dropped today, I was able to take comfort in the increased value of the calls, soon to expire worthless (I hope!)

What do you do to profit in a tanking market?

ScarElbow

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Re: How to best take advantage of a bear market?
« Reply #1 on: December 17, 2018, 04:35:31 PM »
I'd do what you're doing. Write covered calls and/or shorting the market with bear call spreads. One thing I wouldn't do is taking the long side of the market. Or if you're already having a long position and having some cash reserve I'd buy a protective put at the money 1 month out for capital preservation, then I'd use potential profit to purchase more shares if the market continues to slide (that is, if your strategy is perpetually long). With that being said, i'm not taking part in the stock market at all as I'm fully aware of its limitation on liquidity and nonsensical fees. Regardless of market conditions what I'm doing is very actively trading forex currency as I find it more profitable.
« Last Edit: December 18, 2018, 03:43:01 AM by ScarElbow »

seattlecyclone

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Re: How to best take advantage of a bear market?
« Reply #2 on: December 17, 2018, 04:36:50 PM »
I keep investing to maintain the asset allocation defined in my investment policy statement. I harvest losses from time to time as well. Beyond that, stay the course.