if you buy a dec 12 leap strike of 80 with delta of 0.82 cost is 37.15. therefore for the 40,000 you could buy roughly 10 leaps....using 8:10 ratio that would be 8 short calls. spy is now 112.48 so selling the jan 10 113 call you would receive 1.48 * 800 shares or receive $1184 (and the calls are only 23 dte. if 30 dte premiums would be slightly more)...drjoe
--- In ConservativeOptionS
>
> Hello drjoe
>
> I have only just had the time to go through your "DIAGONAL LEAP SPREAD PORTFOLIO STRATEGY".
>
> I hope I am not missing something but I do not see how the returns can be achieved using the allocations described. I have $100,000 total.
>
> Total account = $100,000
> Required return pa on account @ 15% = $15,000
> Fixed (60% of account)$60,
> Return required from DLS = $15,000-$2400 = $12,600 = $1,050 pm
>
> Using SPY @ ~$125
>
> LEAPS = $40,000/$125 = 4 contracts (rounding up)
> CC = .8 of LEAPS = 3 contracts
>
> Would I not be struggling to achieve $1050 pm from 3 contracts, even before accounting for the LEAP per month decay?
>
> Thank you for anything you can help me with and again, I apologise if I have not understood fully.
>
> Peter
>
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