Please note that I have DITM put leaps, and I am selling ATM puts against them. This is the opposite of buying DITM calls and selling calls against tnem. My puts have a delta of -.83, so this is a short position which I plan on selling puts against. I have no intention of acquiring the ETF. I just want to generate an income from the position and insualte myself from any downward movement of the ETF. There was a discussion of this strategy on this board.
Thanks,
RFH
--- In ConservativeOptionS
>
> Are you selling PUTs or Calls? If you are holding LEAP calls, you should be selling calls against them, not the PUTs (as you mentinoed). (Unless you want to add more stocks to your portfolio)
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> Selling PUT is a separate strategy where you do not have stock, but won't mind buying them at the sold PUT strike price (effective cost will be strike -commission received from selling PUT).
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> Pl. make sure you are not selling PUT against your LEAP calls. If the stock price drops, it will be a double down for you as the LEAP will lose value, and the stock will be assigned too.
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> - SRJ
>
> --- In ConservativeOptionS
> >
> > I am currently holding 14 XLE Jan12 80 puts at a cost basis of 24.35. They are currently trading at 22.23. In March I sold 10 at the money Apr 57 puts at 1.47 for an income of $1,550. They expired worthless on Friday. So I'm down around $3K on the leaps and up $1.5K on the income side. I know there was some discussion on how to handle the opposite DLS strategy and was hoping somebody could point me to the topic on this board so I can research it. At what point should I purchase more leaps? Am I selling enough near month puts to make this strategy work? Thanks.
> >
> > RFH
> >
>
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