Option Trading Articles: Re: [ConservativeOptionStrategies] Re: Stock vs Stock Replacement Strategy Are Dividends The Only Reason To Own Stock

Sunday, April 18, 2010

Re: [ConservativeOptionStrategies] Re: Stock vs Stock Replacement Strategy Are Dividends The Only Reason To Own Stock

having 401k acc w/tos i have all kinds of strategies as long as all short positions are covered for any limited risk in uptrend.

-----Original Message-----
From: wavemechanic <fimdot@stocktiger.com>
To: ConservativeOptionStrategies@yahoogroups.com
Sent: Sun, Apr 18, 2010 5:45 pm
Subject: Re: [ConservativeOptionStrategies] Re: Stock vs Stock Replacement Strategy Are Dividends The Only Reason To Own Stock

The powers on high have OKed all types of spreads and naked puts for IRA/401k but do not allow short stuff such as stock and naked calls (so can leg into a spread). I do it all the time at Fidelity, etc. Every broker that I know of permits these positions in IRAs. Perhaps you misunderstood so ask again as most likely yours does as well.

Bill

----- Original Message -----

From: John Hudgens

To: ConservativeOptionStrategies@yahoogroups.com

Sent: April 18, 2010 1:46 PM

Subject: [ConservativeOptionStrategies] Re: Stock vs Stock Replacement Strategy Are Dividends The Only Reason To Own Stock

my experience: I thought stox were stupid as well! Now I don't .

leaps are great if you make sure your leaps are heavily traded -- i.e. small spread. I have seen my leaps change by less than they should because of thin trading. And if the trading is thin, the trader will force you to go to the bid or ask by using your bid as the new bid. Dr Joe's plan works well, because SPY is heavy trade and the bid ask is small. Consider MEE -- in the area you want to own, the spread is near $1 or 5%.

So, if you are willing to concentrate on a few indices or really heavily traded stox, good plan. Otherwise, buyer beware

other issue, in many cases, brokers holding IRA /401k will not let you do calender spreads. Covered calls are level 1, calender spreads are (I think) level 3.