Selling Puts: Have Cash Will Travel Message Board

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Strategies & Market Trends : Selling Puts: Have Cash Will Travel

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To: Tom K. who wrote (1158)	4/9/2000 10:19:00 PM
From: OX	Read Replies (1) of 1235

hi Tom. I admit I haven't priced LEAPS since they are too far out for my tastes... but what would be the difference (excepting added commissions) to just selling front month options at the same strike or one strike lower. wouldn't you gain more prems doing so each month than once w/ LEAPS? (just a guess on my part, but I'm interested in your views here) and as for my stmt you quoted... I admit it is extreme, but the poster was talking about a bear mkt... even picking what someone might think as a strong underlying, say, for example PSFT in early to mid 1998... sell the 2000 LEAPS puts strike 40... I haven't priced it out, but w/ PSFT tanking to under 20 and staying there the past 1.5 to 2 years, I think its very likely you wouldve been assigned early... and if not early, you wouldve been assigned at expiration. if you write out too far, you have nowhere to rollout to.

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