jack i only do etf's. it would work for individual stocks because of the protection you have with the leap put. i keep the leap put until about 365 days to expiration then i role the put out another year. i continue selling puts and if assigned covered calls until stock is gone then go back to selling puts. drjoe every expiration i look at my leap put and will adjust if stock has risen to about the strike of the put. this decreases my risk and puts money in my pocket.
--- In ConservativeOptionS
>
> Dr. Joe,
> I fully understand your reasons for using ETFs as the underlying for the income strategies you have designed. I was wondering if you ever use the put/write with ditm leap when attempting to purchase an individual stock? For example, if you wanted to own a large liquid stock that offers leaps such as PFE or a REIT such as NLY but wanted to control risk, would you apply this strategy to enter the position?
>
> Also, if assigned the stock you stated in one post that you begin selling covered calls. May I assume you continue to own the leap until the stock is called away and then additional short puts are sold? Like DLS, this is an ongoing strategy?
>
> Jack
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>
>
> ____________
> From: joe & leigh <gass20@...>
> To: ConservativeOptionS
> Sent: Sat, February 27, 2010 8:30:42 PM
> Subject: [ConservativeOption
>
>
> ken,
>
> regarding the short put paper: i now manage the leap long puts differently.
>
> when i sell a 90 day put i immediately buy a leap ditm put for protection risking no more than 10% of capital. there is no margin requirements in that position. with the ditm put it is a good thing (not bad) if the stock increases in value. i manage the leap put to decrease my risk when the underlying reaches the strike value of the leap put. i stc the leap put and bto another leap put that again is ditm. each time i do that my risk decreases and i continue selling 90 day puts. drjoe
>
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