Mike, great response on the leaps. I now understand the reasoning. I guess I was using the cigar butt theory. One good puff, then I needed to look for new writes for the following month. (re-inventing the wheel)
AH, but questions beget questions. How about the index options (QQQ). I could write Current out of the money Uncovered call. If the index rises to the strike price, I increase my overall portfolio and write another out of the money call. Then continue this step method till expiration. (Also, I could utilize the 60/40 rule for taxes)
Or, IF option writers outperform buyers (as I currently believe*), Why not write ONE Uncovered call on 50 stocks (throughout the month), without caring about who they really are (efficient market theory). If any one goes against you, then do a defensive move.
*(I know you do the 90/10 buying calls. But, you have the intellect to choose the right stock along with many many years of experience. Something about trading bones with the dinosaurs <g>. The premiums are just too fat for an average investor to make it work)
The narrow spread question. VIGN has an odd 33.375 strike price. If VIGN is at $35, do you sell the 35 and buy the 33.375, or is that too narrow of a spread.(buy the 30). I also noticed BEAS and EXDS had small spread in strike prices. So, I thought maybe that may have been a consideration of yours to seek narrow strikes.
Do you ever use Strangles?
I was surprised to see that sold(uncovered) at the money Leaps. Why did you sell uncovered? What defensive moves would you take if it went against you?
Thanks |
