Unc, I apologize for outing you. Didn't realize you hadn't posted publicly about leaps. Please forgive! All these leaps discussions here clouded my brain. (And, Joel, the premiums on wax & philosophy are high today)
Puts are margineable, you say, well sort of. They hold margin collateral against the puts--but don't charge you interest. It's just that you have less capacity to buy on margin. I don't buy on margin. Voltaire does and probably is a genius at it. But it personally scares me. Theoretically, if you were also buying on margin, or had left no margin collateral room for market volatility, you could end up in a margin call if all your stocks tanked and puts tanked. I think the risk is fairly minimal, and the danger was when investors such as freeus used both significant margin and sold puts. She ended up in a call. If you aren't using your margin for anything else--heck, why not scalp extra $--but always be able to either reposition, or be put the stock (and willing to), and/or leave a cushion for market volatility. You can also buy calls at the same time, one does not exclude the other. I've heard the most bullish position is supposed to be selling puts and buying calls on the same underlying--anybody want to confirm that?
I understand as leader of the thread you need to guide wise investing, as you feel responsible.
Your artemis
(p.s. check your regular email please) |
