The Great Gallic Foie Gras Hack

Kenney had referenced an article in SA by Bret Jensen: “I have been selling some out of money calls on some of my positions in these small biotech stocks that have had substantial run ups over the past year since the end of the first quarter. I would also confine any new money for buying any dips primarily to those large cap “safe” biotech stocks with visible earnings streams and reasonable valuations that I profiled earlier in the week.” I have mentioned doing the same before, and it is based on where the market is going. I think we will have a longer gradual decline in the market, with biotech falling after the DOW. I view Monday as a blip, perhaps CLDN caused as Dr KSS commented, but not part of a larger decline. I would still buy good bios, but move towards those you can option with out of the money covered calls to help protect your basis. Puts would be better in a rapidly falling market. If the markef goes up then you may loose some good stocks. I thought of doing this to ESPR, but I don’t want to loose out on price appreciation, so no covered calls on that one, but CELG and GILD are good ones to cover IMHO.