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Since its been printed, I need to respond that it sounds excellent in theory, but in reality, it won't happen. Let's say you were doing the deep in the money calls last week. When the stock fell like it did, you lost your entire call money and your out of business. The protective puts concept is okay but in reality, you will not be likely to buy expensive enough ones to save your butt. I have done a little of what your proposing sucessfully, but have failed much more predictably. The best strategy is to find excellent companies like AXC, way down in there trading pattern, with a great story and untapped price appreciation, with options. Buy it and sell out of the money calls. Take a 'dividend' each month and on the month it finally appreciates strongly in the correct direction, you will be assigned with a fine appreciation gain. You can use your discipline of getting out of an option by buying some AXC or equivalent positive company, and trading it for 1/2 point here and there. When your buying calls on a company which has tripled in price in one year, you are freaking rolling the dice on having your ass bit off at any moment. Regard this note, I never tried to cut and paste<G>. Steve D. |
