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Strategies & Market Trends : Advanced Option Strategies
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To: Greg Higgins who wrote (1)7/18/1998 4:52:00 PM
From: Vol   of 355
 
Thoughts about Systemic Writing

1) Sell put
2) Assigned stock (if price falls enough)
3) Sell covered call
4) Sell put
5) Assigned stock (if stock falls enough) or assigned to sell stock (if stock rises enough)

3 option commissions, 2 assigned commissions

Alternative:

1) Sell put
2) Assigned stock (if price falls enough)
3) Sell stock (for loss, of course)
4) Sell putx2
5) Assigned stock (if price falls enough) or nothing (if stock rises enough)

2 options commissions, 1 equity commission, and 1 or 2 assigned commission. Plus, you take a capital loss, which helps taxes.

This is based on a few assumptions. Equity commissions are less than option commissions; usually, a lot less. Assignations are costly (I think similar to option commissions). I think this alternative helps lower commissions if Systemic Writing action is required.

Vol
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