Watch List update: ITB
As part of this blog I have added a watch list. These are securities that I have an interest in and want to keep an eye on, looking for trends. So far I have the large number if one item on the list. My plan is to add an item a week and review the list weekly.
Today I want to highlight the watch list item: (ITB: 16.40 +0.91 +5.87%). ITB is an ETF of home-builders and related construction companies. If you believe the market is a leading indicator of the economy, this security could be a good leading indicator of the housing market.
The housing market will bottom out soon. From my prospective here is California, the peak was the summer/fall of 2005. The “forecasters” always put the recovery out about a year from today’s bad news. We will be well into the recovery before the “experts” recognize it and let everyone know on CNBC.
From a low of around $24 Monday morning, ITB is now trading at about $28.40, a gain of 18% in a little over two days. These two days do not a trend make, but it will be interesting to see if this turns out to be the low of the housing construction market.
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Comments
I like trading $7 to $10 stocks for covered calls. The strike prices are only $2.50 apart so you can find a stock you like at say $9.60, sell the $10 call 60 days out and if it is called away you make a nice return.
Learn how to do an option screen with the online broker you pick that meets the criteria you want. Then research the individual stocks. In this market you must really like the stock you are writing a covered call on, especially starting with a small account. Good luck!
I am new to Options - and am a little more conservative. I have been reading a lot about cc’s.
I have about $1200.00 to start - what reccomendations can you make. Less volatile companies. $5-10 stocks???
Any suggestions?