MYMWFY

Here's my "working" algorithm on trading options...  I am pretty new at the game, but hope to learn by trying things and getting feedback.  What do you think about the below?   Algorithm Start: Sell a put on a symbol you don’t mind owning If the put goes ITM Roll the put out (and down, if possible) Or, buy the shares Need to have a cushion  If own shares, sell covered calls on it If covered calls go ITM, roll up and out. When the market drops Sell puts Spreads on VIX Buy LEAPs When the market goes up Sell calls

According to Lee Lowell ( see his video here ), it makes sense to buy calls with the expectation that they will go up in value. (These are also called LEAPS - long term expectation of appreciation.)  Here are the benefits: You spend less money on calls - maybe 30%  But you gain if the underlying stock gains without having to own the shares... Here are the risks  You can't buy and hold. Calls expire, so you have to pay attention to them. The maximum loss is the price of the option.  Here are his rules for "designing" a LEAP Got far enough out in expiration to "see a change" - maybe at least 9 months  Go for at least a 90% delta  Have a breakeven of near current price  Have a stop-loss rule - maybe 20% drop of the underlying  At expiration, what should we do with the option?  Sell it  Exercise it  Roll it Well, let's try it!  Let's track a LEAP and see what happens!