You say you consider closing after capturing 70 to 80 % in first two weeks. My question was... what about nearly 50% in one day? Do you wait for 70%?
Sorry for typo not 190 I mean t the 118 strike for May.
I appreciate your patience. Sorry for the numerous questions, but I find your strategy intriguing.
Thanks,
Leo
From: joe & leigh <gass20@aol.com>
To: ConservativeOptionS
Sent: Tue, May 4, 2010 2:42:45 PM
Subject: [ConservativeOption
leo,
first don't follow my plan, read it and use ideas to develop your own
second my strategy is a long term strategy not looking to pick up money every day, i am an investor not a trader
third i only wrote my paper because i got tired of people asking the same questions over and over
fourth i would consider capturing premium when i got 70 to 80 percent if i captured that amount in first two weeks
not sure what 190 may call you are talking about????
leo my paper is just a framework for others to develop their own trading based on their own needs regarding income and risk.....i hope you understand.. ..i don't like giving advice to individuals trades but only the concepts of the strategy..
drjoe
--- In ConservativeOptionS trategies@ yahoogroups. com, Leo <leobusc@... > wrote:
>
> Dr. Joe:
>
> Here is an interesting situation:
>
>
> Yesterday, I bought the Dec. 2011 90 SPY call with an 85 Delta and sold the OTM 120 and sold the May 122 for .94.
>
> In one day my long call has dropped to an 80 Delta and my short to 40 cents.
>
> I didn't put this trade down to wheel and deal, but to basically follow your plan. But a call that erodes 55% in less than a day may be an unusual opportunity especially since my long call was an 85 and you only called for an 80 Delta entry. So I would retain an 80 Delta.
>
> I am thinking of buying back my short for 40 cents and selling the 190 May call for $195.
>
> Am I being schrewd or greedy?
>
> Thanks,
> Leo
>
>
>
>
>
> ____________ _________ _________ __
> From: joe & leigh <gass20@...>
> To: ConservativeOptionS trategies@ yahoogroups. com
> Sent: Tue, May 4, 2010 1:56:50 PM
> Subject: [ConservativeOption Strategies] Re: spy dls update
>
>
> if number 1 doesn't give me enough premium to achieve my income goal i choose number 3.....i do not do number 2...drjoe
>
> --- In ConservativeOptionS trategies@ yahoogroups. com, Leo <leobusc@ > wrote:
> >
> > Dr. Joe:
> >
> > OK, now i think I understand.
> >
> >
> > If the underlying Stock/ETF falls you have three choices:
> >
> > 1. Retain the Stock/ETF and sell calls against it at (Though you won't continue to receive income as high as original trade and if stock falls far enough you may not find any premium available).
> >
> > 2. Roll down a couple of strikes to maintain a 80+ Delta. This will require additional capital.
> >
> > 3. Purchase additional Leaps at the newer lower price and sell calls against them. When the stock/ETF returns to the original entry price you sell the added leaps to return to your original trading plan. This will necessitate additional capital until the stock/ETF returns to the original entry price.
> >
> > Dr. Joe it sounds like you belong to the choice number three strategy. Choice number two necessitates additional capital, but it differs from choice two in that the capital can be recovered by return to the original stock price.
> >
> > Thanks,
> > Leo
> >
> >
> >
> >
> > ____________ _________ _________ __
> > From: joe & leigh <gass20@>
> > To: ConservativeOptionS trategies@ yahoogroups. com
> > Sent: Tue, May 4, 2010 8:40:34 AM
> > Subject: [ConservativeOption Strategies] Re: spy dls update
> >
> >
> > leo, not sure what you are asking. if first email you said if underlying drops to 118 would i roll up from the 90 strike to 85 strike???? if you meant roll down, i would sell at 90 for less than i would have to pay for the 85 and this would cost me money. if i rolled up from 90 to 95 i would take money out but at the cost of my delta. i generally never roll leaps, make adjustments, at same expiration month. i wait and roll out when new leaps available and there is about 12 months to expiration.
> >
> > --- In ConservativeOptionS trategies@ yahoogroups. com, Leo <leobusc@ > wrote:
> > >
> > > Dr. Joe:
> > >
> > > I understand why you buy the additional leaps. My question is why do you do this instead of simply rolling your existing leaps two strikes or so?
> > >
> > > This way would also provide you with the additional premium wouldn't it?
> > > Leo
> > >
> > >
> > >
> > >
> > > ____________ _________ _________ __
> > > From: joe & leigh <gass20@>
> > > To: ConservativeOptionS trategies@ yahoogroups. com
> > > Sent: Tue, May 4, 2010 6:00:26 AM
> > > Subject: [ConservativeOption Strategies] Re: spy dls update
> > >
> > >
> > > 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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