#LongCalls #LEAPS – I’m finding another advantage of going out in time as far as possible. There’s no need to get super aggressive with weekly sales. Still very easy to cover cost by selling about 30 days out leaving plenty of room for whipsaw. Here’s my WYNN example:
Bought to Close WYNN NOV 9 2018 115.0 Calls @ .05 (sold for 1.32)
This reduces the basis on the 130 strike LEAPS to 23.05
With 26 months to go that only requires .87 per month to cover the cost so:
Sold WYNN DEC 7 2018 115.0 Calls @ 1.13
Expected move on the Dec 7th expiration is about 12 dollars so even though selling below the LEAPS, it’s still outside the expected move and well above the .87 required.