A.I.M. Users Bulletin Board

[Toofuzzy]

Hi canray

1) sometimes I will buy a $30 stock by buying a $15 call as far out as I can which will have a TINY time premium because it is so far in the money. I can then also SELL a $35 or $40 call to cover that time premium. Doing that preserves cash or allows a bigger position.

2) if I own 1000 shares and my next sale will be at $35, I might sell one $35 call. If the stock goes to $35 before expiration I will sell an Aim directed amount at $35 anyway as the option premium hopefully takes me to the next Aim directed sales price. At the same time I can sell one PUT at the price I would buy.

At the present time volatility is very low so there is not much premium in selling options and buying options might make more sense or just waiting. Maybe buy a put as a security reaches a sell point instead of actually selling the shares?

Whatever you do you need to make sure the premiums make sense to YOU.

Toofuzzy