Dr Joe I used the forum a bit early this year and dropped it. I have matured a lot since then and know a lot more. Not enough, but a lot more. Over this last year, anyone with an ounce of brains could be sucessful in options. I worry about the next few years. Your conservative approach takes a lot less time than my more aggressive approach, can I maintain the discipline!? I notice that you prudently always plan to roll out I did not see a plan to roll up but rather a plan to STC on the leaps to cover the stock going up in value and hurting you on the short calls. Since, due to gamma, as the stock goes up, the delta of the leap goes up, you could roll all the leaps to a higher leap, reap some additional premium and use that to cover the purchase of the SC and/or reduce your overall investment. Is there a reason why you chose to not do so? I fear this concept is beyond a lot of your readers and might even be dangerous. My basic understanding of using leaps for premium collection is write, write, write and roll, roll roll!!!.. I am fortunate in that I do not need a lot of income and I now have a number of positions that have 10 leaps with deltas greater than 0.75 and positive investment. I both roll up and out. I hate the 2 year leaps because of the spread and low open interest -- one easily gives up 20%. Perhaps not so much on the ones you use, but on the ones I play -- AXP, ABX, etc, its ugly! So I am sorta forced to be a 10 to 15 month guy. I guess it becomes more of a calendar spread than a leap spread, but Schwab is now letting me do those in an IRA. Thanks John |
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