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wan123: I am retired and would like income with safety.
I am thinking of selling cash secured leap puts(in the money or out of the money) for income, on high div blue chip stocks like AT&T.
opinions appreciated


I am retired as well (79 years old at this writing, so well into retirement years, living on income from my IRA plus a nice supplement from SS. No pension on the side...only the RMD from the IRA)

I do a lot of options trades, and very few of them are short Puts such as you're describing. What you're suggesting is fine, and I may be more risk tolerant, but I find a better return can be achieved from the strategies that involve debit transactions at the start.

If you're going to cash secure your Puts, it's really not conceptually different from investing in, say, a Bull Call Spread that will return over 50% per year (as per the AAPL BCS recommended yesterday). A BCS is also "set and forget" which fits nicely with retirement years. Your cash is tied up either way.

At present, I have 15 positions. Six are Bull Call Spreads. Four are Diagonals. Two Covered Calls. One LEAPS Call. Only two short Puts. In effect, they're all "cash secured." But the return on capital at risk (which it is regardless of which strategy) from most of those others will be (based on past experience, which of course is no guarantee of future) will be better from those where I started with a debit position.

mathetes
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