buffalo bob...re"itm,atm,otm...dell options"
no set answer, depends what i'm trying to do...if i'm selling a put for income/reinvestment capital, i look for an expiration/strike which will give me the highest percentage return, especially on a high volatilty down day....
if i want the stock put to me,taking a position within a week of expiration...i look for the atm,itm,otm, which gives me the lowest cost basis when put, comparing to what the common would cost on the same day...(yesterday i went long dell common, not trying to back in, being cautious of dell ability to move up strongly...rather guarantee in at this time than out)...
writing covered calls...prefer short term, small premium far otm for incremental income in a up market...don't want to lose my inventory...
down to flat market covered calls perhaps look at it a little different, especially if i want to exit the issue...
check with your accountant, for you may find leaps give you the ability to legally shift tax liability from year to year...
hope this helps, ed a. |
