Re: Jeff's new book...
I haven't read it. I'll likely pick it up in Aug. Largest drawback I see with his implementation is capital required for the higher quality stocks (e.g. Dogs of the Dow) he recommends with available LEAPs. Spread across 8-10 positions with a sufficient number of options in each to be able to implement AIM would require quite a bit of capital.
Going out to the furthest available LEAP, as he suggests, and rolling with ~1 year remaining to expiration is definitely favorable from the standpoint of Theta, limiting premium erosion from the extrinsic value. Personally, I'm not a fan of buying Out Of the Money options and even At The Money options' movement is dampened relative to the underlying issue due to the 50% Delta.
I read Jeff's other book late in 2018. I've traded options for quite a few years, but favored premium selling and have never found a great system as a premium buyer. However, I believe this system has merit.
So, starting this past Feb I began to selectively implement the LEAPS strategy, buying a different issue across industries every ~6 weeks. I'm currently holding the following five issues, all with the Jan'21 expiration:
• BG
• GE
• INTC
• KO
• WBA
I've entered each position based on the following AIM criteria:
• LEAPS/Cash ratio: 67% / 33%
• Buy SAFE %: 10%
• Sell SAFE %: 10%
• Minimum Contracts to Buy: 1
• Minimum Contracts to Sell: 1
Individual Statistics
• Best Gain on Initial Investment: 106.1%
• Largest Cash Position: 61.0%
• Worst Drawdown on Initial Investment: -44.7%
• Largest Cash Drawdown: -18.1%
Portfolio Statistics
• Total Gain on Investment: 23.8%
• Percent Invested: 57.1%
• Percent in Cash: 42.9%
-AIMStudent
