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Hi Bob, I suggest that you consider selling

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SFSecurity   Friday, 01/05/18 07:52:18 PM
Re: BowlerBob post# 42542
Post # of 43242 
Hi Bob, I suggest that you consider selling a PUT if you wish to continue to add shares of AMZA to your portfolio. The real virtue of selling PUTs and CALLs is that, if the PUT sale completes, it adds the shares to your portfolio at a net price that is lower than you sold the PUT at. As I said about AMZA, the $8.00 PUT will reduce the net price to $7.512/share. Add that to the shares you already own and it lowers your overall price which helps AIM get sales.

If it is not exercised, so what? You made a bit of money anyway. In a way this is "interest" on your cash reserves, much better than letting it sit in plain cash.

If it is exercised, then you got in at a bit lower price which allows for a sale sooner.

I've back tested several possible choices, however, the amount earned via selling the PUTs is not necessarily accurate as I could not find actual prices to use. If someone knows where to get past option prices, please let me know.

Anyway, assuming relatively low dollar amounts for the monies brought in by the sells of the PUTs, using the whole number of shares in the AIM spreadsheet and 2/3s of the number of shares to sell a CALL on works better than AIM alone, even if the CALL is never exercised because you can keep selling future CALLs bringing some cash that adds to the money brought in by AIM alone.

Best,

Allen







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