A.I.M. Users Bulletin Board

[Toofuzzy]

Hi SF

For fear of boring the bejesus out of everyone else you might want to ask me a question like that in a private message.

But here goes.

I bought $10 January 2018 calls. For arguments sake lets say the time premium was $1.50 ( current price lets say $17 and $8.50 cost for $10 call) I then SOLD $25 January 2018 CALLS which more than covered the TIME PREMIUM (for arguments sake lets say I took in $2.50 )

So my COST is a net $6.50

If it gets called i make the difference between $16.50 and $25 or $8.50 which is more than the $6.50 I had to have in my account before starting.

It is basically buying on margin without paying margin interest. I think I can be happy with a more than 100% gain in a little over a year.

The $25 call only covers a little more than the time premium of the $10 call, not the whole premium.

Google "Poor mans covered call" you might find a further explaination.

Toofuzzy