I WOULD indeed exchange common for leaps after the split, getting 3 to 1 leverage.
OK, then, there are two questions that come up:
1. Assuming the stock is still close to its high, is it best to sell the common and buy the leaps at that point, or is it best to wait for a correction before selling the common to buy the leaps? There was a discussion on this in the Q thread, and it seems the more experienced options people favored waiting for a correction, which seemed counter-intuitive to me. Can anyone explain this strategy, if indeed this is the best strategy?
2. Assuming one wants to sell the common close to its current price, the leaps have not yet extended out to the new levels, so is it best to (a) wait until new strike prices print, (b) buy the highest strike price available, or (c) buy DIM leaps? |
