Hey Doc, as another strategy against the old margin police how about this. First, when you buy something at $100, it really sucks having to write a cc against it at $50, and 6months out to boot.That is kind of scary to me. You know you'll have to buy the call back if you want the stock, and more then likley buy it back when it is ascending, not decending. Additionally, you are married to the call for quite a bit longer then most people want in these circumstances.
Tom has touched on this other strategy and said it takes balls of steels...what do you think. With call prices so depressed, could we not sell stock long, buy calls and end up controlling more shares, while clearing some cap room under margin.
For instance, I could sell 10000 shares of elon and collect $55 - $60k, turn around and buy 10 - 20 calls. I control more stock, and have cleared some cap room at the same time. The risk of course is having the calls expire worthless, but would this not be a good time for this strategy...I mean here at or near a bottom, with a soon to be upswing on the horizon ?
Opinions Anyone ??? |
