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December 10th, 2010 at 10:33 am
Phil:
I’ve been wondering for the past week or so….A strategy I remember you using early this year a few times was buying LEAPS calls on a underlying (e.g. WMT), then selling premium against it. Our VIX is low and LEAPS are cheap to buy. The only thing I can think of as to why we are not employing that strategy is that the underlying stocks, ETFs etc. are overvalued and due for a pull back. A lower VIX and stocks NOT overvalued would be a better time for this strategy. Is my thinking here correct here?