4 Comments

I like covered calls and synthetic covered calls.

I find a good company and benefit from price appreciation, some times dividends, and time decay.

The premium I receive reduces my risk and cost.

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Clever approach. I focus on LEAPS calls as leverage to the underlying price changes. It works pretty well with volatile assets like commodities, miners, energy, and EM stocks.

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That's an excellent strategy. There's only only problem with LEAPS.

A deep in the money LEAPs could account for 10 to 25% of a small account.

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Aug 18·edited Aug 18Author

I agree. DITM LEAPS on stocks like $NOC or $MELI are prohibitively expensive for accounts below $1 million.

I like DOTM LEAPS; the convexity is more pronounced (if the strike and expiration are picked prudently), and the time decay is smothered (at least in the first half of option life).

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