Tuesday, June 2, 2009

Re: [ConservativeOptionStrategies] Update on Dr. Joe's DLS Strategy

 

Bob,
 
Thanks so much for answering my questions. I was trying to understand Dr. Joe's DLS strategy. My understanding is the only difference between DLS and covered call is that DLS can average down Leaps during the down market.. If the DITM Leaps has a delta of 1, then the DLS portion of the portfolio has the same risk/reward with the covered call. But the additional cash reserve will enable you to purchase additional leaps in the down market. I know this is an income strategy. But if I don't need the income and will invest the income, I was wondering what kind of performance the strategy will be, comparing to the covered call. Also, can you elaborate more on the hedge you used if you can?  Have you tried DLS strategy on stocks (not deep ITM leaps but one strike below but close the entire position once it reached 5-10% profits like recommended by www.compoundingstockearning.com)?
 
I really like this ground, but it is not active and I don;t know where Dr. Joe is
 
Thanks in advance,
 
Mike

--- On Thu, 5/28/09, Bob Hug <rchug@bellsouth.net> wrote:

From: Bob Hug <rchug@bellsouth.net>
Subject: Re: [ConservativeOptionStrategies] Update on Dr. Joe's DLS Strategy
To: ConservativeOptionStrategies@yahoogroups.com
Date: Thursday, May 28, 2009, 2:17 PM

Mike:
I have been trdaing it since 9/07 (yup, right near the market high!). While I was still able to generate decent income through the move down of the market, if I hadn't hedged my positions, my portfolio value would be substantially down. However, this was the case with any kind of income generation covered call strategy. I used profits from my hedge to purchase additional positions. If/when my initial positions recover, I will simply have many more positions with which to generate on-going income. It has worked well for me, but because I hedged my positions.
Bob
----- Original Message -----
Sent: Thursday, May 21, 2009 2:04 PM
Subject: [ConservativeOption Strategies] Update on Dr. Joe's DLS Strategy

Hi All,

I have not traded this strategy at all. Can someone traded DLS kind enough to give us an update on how it fared since last summer.

TIA,

Mike


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