Wait...you said you are going to sell weekly calls to offset the "put"..what ratio are you planning to trade, I.e. how many weekly's will you be short?? What's the IV range for 1 year vol?
do you mean that if i buy it now there can be a drastic change in the vega tommorow, or do you mean that the farther out i go the higher the vega is, meaning the closesr to expiration it gets the faster it will decrease in price because the vega is decreasing?
without doing the exact math. just looking now at an option chain i can sell a 138.75 call on apple that expires this week that will net around 30 cents and buy the 144 or whatever i choose for 10 ents or less.
ok....By purchasing a long dated put,you are long vega...You should have some idea of IV percent rank,and what the range of 1 year ATM vol is....Without looking closely,you are buying stock and a long dated ATM put..You are synthetically long the call,lets say a delta of .60..You are attempting to finance the call with a 138 call which is only 3.8 percent OTM..If the stock pops,you will get short fast and if assigned will now be in the long dated put.. Dont like the trade
even if the stock pops i don't think it is a problem because i am probably not going to lose any money on the pop since i am long a farther otm call so as long there is not a large strike difference between the stock to the short call, and the short call to the long call.
So are you saying you've found a strategy where you can't lose? What if the stock goes waaaay down? You have a put to limit your loss. But you won't recover the premium you paid for the put. BMK
i saw where you ae going to possibly buy the upside wing and be short the weekly vertical...You really want to sell a cheap vertical to finance a leap??
can you kindly elaborate on the problem that you have with this method? i only wants to use something that works. so if you see a problem, by all means tell me.
you are buying a 20 dollar+plus long dated call,and trying to finance it with 20 cent short dated verticals that will do nothing but take away your upside..for 20 cents