I did a put credit spread on a stock last month. I sold the long leg just before expiration and allowed the short put to be exercised. My cost basis for the stock was 33.10. I don't mind owning the stock as it pays a good dividend. I was thinking of selling a "strangle" where both legs are in the money. I could sell another 35 put, as well as a 30 covered call for 7.20. If the PPS stays in the 30-35 range both options would be exercised. The stock PPS is currently about 32.50. Here's how I figure the numbers: Cost $35 - original short put $35 - new put -------------------- $70 - total cost Income $1.0 - original spread $0.7 - selling original long put $30 - from having CC exercised $7.20 - selling new strangle -------------------- $38.90 So if both legs are exercised I would wind up with the same number of shares that I have now, for 31.10/share (70.00-38.90). There's a chance my current shares would be called early since there is a 1.40 divvy due before expiration (I'm thinking of doing the Aug exp.). There is another 1.40 divvy due after the Aug expiration, which may or may not also include a special of up to 2.00. Even if I miss out on the first dividend I would still be .60 ahead (33.10-1.40=31.70 vs 31.10). I figure the worst case is the PPS drops below 27.80. Is this totally whacked? I've never heard of doing this before. Am I missing something?