hedging with leaps

that's one way to look at it......

 

From what I can tell you really dont know how rich/cheap 1/2023 vol is trading,and you have know idea what the time skew looks like...you are taking on blind vega risk

look before you "leap",no pun intended

 

This strategy (and most others) can be simplified since selling a covered call is mathematically identical to selling naked put at the same strike. So your idea is equivalent to selling weekly ITM puts against held LEAP OTM puts (without having any shares). Just something to think about.

 

I am convinced with the strategy you are wanting to apply. You can give it a try.

 

If you are not experienced enough, hedging can be quite difficult. Do it only when you know what it is.

 

If I were you, I’d be very careful with hedging. It is undoubtedly a great strategy to implement and make profits but when it comes to risk, you should consider all the aspects of it.

 

?????
care to explain?

 

don't you mean short weekly calls?

 

read my posts carefully. i meant what i said.

 

"Happy", cool name, by the way...

Just ask questions here:
https://www.elitetrader.com/et/threads/dests-overwrite-journal.359397/page-19