Allen,
A comment on puts. They can be sold naked in an IRA if you use either cash or short term treasuries to back up the amount necessary from an assignment.
i have heard there are brokerages that allow this (cash-covered naked puts) in an IRA, but those tend to be brokerages i've never heard of (doesn't mean they aren't good, of course). i have not found a major discount broker i'd want to deal with that allows this strategy, and going to some place that does is not worth the bother for me since i can achieve the same effect by selling ITM calls against common.
i have noticed the CCs for dummies thread likes the idea of writing calls against "core" positions, but i personally consider that something of an oxymoron. i wouldn't write a call if i wasn't ready to have the stock called away, because i think "repair" strategies (chasing short calls in an uptrend to avoid being called out) is a loser's game in the long run. and if i am ready to give up a stock at short notice due to a call, then i can hardly consider it a "core position".
that may sound like quibbling over semantics, but i think it has pretty important implications for call-writing strategy. my own bias is to use call premiums as a simple discounting mechanism, whereby i will either own a position i am comfortable with at a discount or else get called out (that seems to be what you are describing for your CIEN strategy). that is different than treating calls as a sort of surrogate dividend on a LTBH stock, and sometimes being in the position of having to buy back the call at a much higher price to avoid losing the stock, which i think is a sort of pseudo-naked-call strategy. i voiced my opinion on this issue on the CC thread last summer #reply-16230365 |
