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By doing this you will effectively be getting cash back on your investment every single month that you hold your LEAPs.
Over long-term this will not only offset time-decay of your LEAPs, but also offer you some downside protection, should stock go in opposite direction that you want it to.
This is known as a Calendar Spread and is a much more conservative way of speculating with LEAPs.
Important: If stock rises above your sold strike price for your current month Calls or below your sold strike price for your current month Puts, then you risk being assigned/exercised.
You should never allow this to occur because moment you are assigned you will lose whatever time value is left on your LEAPs.
It is far better to close out trade for a profit by buying back sold option and selling your LEAPs for an overall profit or simply holding your LEAPs and then writing (out of money) options against them for next month.
Click here for more information about LEAP option trading.
About The Author
James Thomas is a successful private option trader and has created http://www.option-trading tips.com as an informative no-nonsense resource full of useful tips and information designed for option traders to improve their trading results.