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Hi Brente,
I own year 2001 LEAPS in a variety of quality stocks. I find that
in-the-money LEAPS are a good substitute for owning the stock. To generate a
consistent monthly income, I sell near term out-of-the-money calls against
the LEAP.
For example: AAPL Year 2001 LEAP Strike Price 30 sells for appx. 14.50
If you sell the May AAPL 40 call, you will pocket 3/4. That's over a 5%
return for the month. Plus, if the Apple stock appreciates in value to $40,
your leap investment will have appreciated to $16-$16.50. Long term ITM
leaps don't really start losing time value until well into year 2000.
This is a conservative use of LEAPS, but the position needs to be monitored
regularly for dramatic upswings or downswings.
Good luck (Remember, it's better to be lucky than good).
Mike Parnos
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