Short Puts: Rows of Marching Soldiers

Strategy: Sell regular near-term short puts for solid performers, use the net credit to make speculative purchases of long calls for big payoff.

Short puts:
Like a row of marching soldiers: progressive tiered short puts for solid companies, 2-4 months out with a strike at 20% below current level. Net credit each position around 1K, net risk: 10-15K
Use 50% of the net income to make long bets on promising companies

Long calls:
Near-the-money long calls, 4-6 months out, invest around 0.5K, for promising companies or based on overall market and sector performance
Sell when call is 1-2 months away, unless it's almost worthless at that point

Do this repeatedly

Skewed Iron Condor (2) - TOL

The previous trade, in Pictoral form:

This is a 4-leg trade:

The profit & loss picture looks like this:

Skewed Iron Condor - TOL

TOL:
Curve-fitting: goes up by 2/mo

  Long Mar 2013 38 Call Ask: 2.90 x 1

  Short Dec 31-21 Put credit: 0.70 x 3
  Short Dec 32-22 Put credit: 0.90 x 3

  Short Dec 47-42 Call credit: 0.40 x 2
  Short Dec 46-41 Call credit: 0.55 x 2

   Short Dec 42 Call credit: 0.55

2.10 + 0.80 - 2.90 = 0.0
2.10 + 0.55 - 2.90 = - 0.25

  Mar 2013 38 Call / Sell Dec 2012 42 Call debit:  -2.35
39-44 debit: -2.30
38-41 debit:  -2.15
39-42 debit: -1.95


Total position:
  Buy Mar 2013 38 Call / Sell Dec 2012 42 Call:  -2.35  x 2
  Sell Dec 2012 31-21 Put Credit: 0.70 x 3 = 2.10 x 2

  Mar 2013 38 Call Ask: 2.90
  Dec 2012 42 Call Bid: 0.55


Results, By Dec:
=> Below 31 lose money up to 21, max: 6050  --> can roll put spread downwards
=> Between 31 and 38: loss: 50
=> Above 38: gain money up to 42, max: 750  --> can roll short call upwards

Evaluate weekly; if it gets half-way to the short positions, roll those out again.