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Gold/Mining/Energy : Big Dog's Boom Boom Room
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To: Big Dog who wrote (141092)10/15/2010 12:52:15 PM
From: Bearcatbob  Read Replies (1) of 206184
 
1. Which is the better deal, selling the option at the same strike price, but further out in time or selling the near month? Is the November Put at X strike price a better deal than the further out Put at X strike price? How is this figured. I know that the risk profile changes intangible) as well as the pure math return. How do I do the math part? What to look for? (The intangible part is interesting too...but lots of factors.)

Big - I almost always do the near month. The Time Value Decay is very rapid in the last few weeks of a contract. It is very flat in the out time. I try to capture that accelerated decay month after month after month.

2. How to determine which is better on a given stock - to buy the stock and sell a call, or to sell a put? I haven't got my head around this yet. I think the book covers that.

Big - I prefer to buy the stock and sell an OTM call to have the possibility of appreciation. I think ITM covered calls and puts are about the same.
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