From: joe & leigh <gass20@aol.com>
To: ConservativeOptionS
Sent: Tue, May 4, 2010 6:00:26 AM
Subject: [ConservativeOption
leo, i trade mostly spy, iwm, eem. three diversified etf's. i liked the technicals on eem recently. i use 3 month linear regression and stochastics. ....eem was on the bottom channel of the second standard deviation in a 3 month uptrend and stochastics showed an oversold position.
re: dls. i have an income goal monthly. i calculate (explained in detail in paper) how to determine strike to sell to avoid selling leaps below cost basis. the more underlying drops the further otm the short call strikes will be. at some point if underlying drops continue dropping you will not be get enough premiums to meet your income goal. that is when i buy more leaps using same criteria as the original ones. buy enough to just meet your income goal. drjoe
--- In ConservativeOptionS trategies@ yahoogroups. com, Leo <leobusc@... > wrote:
>
> Dr. Joe:
>
> I read and enjoyed your paperof DLS and am trying out a SPY trade buying the
> Dec 2011 90 calls and selling the May 2010 122 Calls.
>
> My question is about your strategy on pullbacks. I understand that in the event of a drop in the underlining you don't like selling calls for less than your entry price. Do you always buy extra calls or do you sometimes roll up? ie: Should SPY fall to 118, I might than roll my Dec 2011 90 Calls to the Dec 2011 85 calls.
>
> Now your plan suggests buying more calls (which I guess would be the Dec 2011 85 calls. Is your logic simply put buy low and than sell some of the original Dec 2011 90 calls when the price returns to original levels?
>
> Thanks,
> Leo
>
> P.S. I also interested in your EEM triple put trade. Why did you select EEM?
>
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