A.I.M. Users Bulletin Board

[SFSecurity]

Hi Gang, As an experiment I bought GUSH, a 3x leveraged ETF at $19 and sold calls for half of the number of shares at $22 strike price then sold puts at $17.50 for enough to bring my total position to a bit less than $20,000 should the stock be put to me. If they are my cost per share will a bit over $15, if they are not my cost per share will be about $11.35. If the calls hit their strike price then I will make $1200 on selling those shares, dropping the remaining shares to a bit over $10/share, half of what the current price is and I'll still have shares waiting for an AIM sell which might well be quite soon. We'll see what happens over the next month or so.

All I can say is Wow.

Now I'm going to look for another leveraged ETF, because of the volatility, and simply sell puts at about 10-15% below current market. If they are put to me that would make for a fairly quick AIM sale provided the market doesn't crash big time. I have my next buy point set, in my thinking, at 20% down from the put price and the sell point at Tom's 10% above the put price, maybe a bit more depending on the income at a given strike price. Again, I will sell the call for half of the AIM position size so that I have some left to play with.

I've paper and penciled this and it looks like this approach to getting a position started puts one in a better position for the next sell and still protects, somewhat, against a down market. We'll see.

In any case I've sold some out of the money calls on a couple of positions that have been vacillating +/-5% for more than a year so this income has reduced my cost basis and almost recovered half the losses my mother made on them in the trust fund. Plus I set the puts far enough out of the money that I will be out of them with around 2-3% positive return. Not a hell of a lot, true but much better than they have been since I took over as trustee, so I figure that's great.

Best,

Allen