Maksims Covered Call Options Forum

[yuccamtn]

Technically I will convert my Jan2010 and a few Jan2011 vertical spreads to diagonals more likely than calendar spreads (same strikes). What turns me on is the ability to use my short calls dynamically rather than passively (as a leg of a rigid vertical). When my vertical turns against me, my short leg is showing a profit but my long leg has a larger loss. With this new flexibility, I can buy back the short call (book a profit, thereby lowering my basis on the long call. Then I can sell near term OTM calls to chip away at the basis of the long call. Depending on market conditions, I can decide almost month to month what strike I want to sell. Great flexibility to adjust to a highly volatile market.

Thiw way I don't have to wait a year or two to find out if my original market expectations are correct. And I can book profits throughtout the year. You gotta love options!