Trading options

Lately I’ve been doing more swing trading (a few weeks to a few months) than long term buy and holds. Most of my swing trading is done with options. I like to go 3-4 months out, buying a few points in-the-money.

I did well with homebuilders puts when they first tanked, and lately have been buying puts on the XLF (financial index), XHB (homebuilder index), and QQQQ (Nasdaq 100.) The big runup in the stock market last week whacked them good, but they’re now almost back to what I paid for them, and since they’re March puts, there’s plenty of time left. In fact, I figured when I bought them that there could be a Santa Claus rally that would ding them. However, it now appears that rally may have ended early.

So, trading and investing needs to match your style. Current month options are too flaky for me. I like going several months out, so that’s what I do.