The model I described is why I choose OTM and common rather than DIM. From a negative perspective, and to put it more simply, DIMs are expensive, and a 50% correction of the kind we had wipes you out, especially with near term options. With common you only lose 50% and can hang on for the long term, if you wish. The OTM are cheap enough that I can afford to lose it all in a crash, but make out in a run. I did OK with my CREE OTM this way, a 10 bagger. Not saying I can repeat that, but this is just gambling anyway. I also lost out on the MSFT gamble, but not nearly as much as if I would have had DIM.
As I said, I can apprecitate valid arguments for DIM, but safety is not one of them. |
