Efficiency of capital round 3…

Efficiency of capital round 3 or 6, lost count.

While sitting in airports and riding in the plane was thinking about how to improve #pietrades and any trade you were assigned. Here is what might work, may convert MU tomorrow to see how it works.

1. set up weekly ladders, 21 DTE seems to be ideal except going into earnings. EXPE and WDC are holding most of its time value right up until tomorrow. Less chance of getting assigned, easier to adjust farther out, more premium for strikes OTM. Also they decay quickly enough you can usually roll in 1-2 weeks if they stay OTM.

2. If put deep ITM better to take assignment and convert to covered calls.

3. However, instead of taking the stock long term like I did with GM (22 weeks), may be better to sell the stock at a loss and reset to a #fuzzy using a calendar or lower strike call. Then you are in the trade longer term, cost basis goes up, but the big advantage is you free up a ton of margin to use on more profitable trades. Then just a matter of recovering the initial loss and working the LEAPs down to cost basis of zero.

I may try this as a long term experiment with MU tomorrow, close to break even on cost basis but want to keep collecting MU premiums but would rather not hold the stock for 24 months. This is how I recovered a 17 point drop in SWKS so I know it works. My only concern is could end up with a bunch of #fuzzies when what I really want is #pietrades. However, once profitable could close out the #fuzzy and reset.

Will keep everyone posted.