No. of Recommendations: 1
Depending on who your broker is, short the leap even though you are long the bond may be considered a naked call. You have to have level 4 clearance from your broker. I wouldn't do it.

Now, long the stock and short the LEAP on that stock is something I do all the time. Selling a 2-year leap maximizes the premium, although the shortest calls would be maximum time decay per day. Picking the strike skillfully is important. Recently the LEAP I sold on Colgate-Palmolive with a strike of 90 expired worthless--and now look at it! And no, I haven't re-optioned the stock.

Best wishes, Chris
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