Buying those is a bullish strategy. So you believe that the stock is going up, would you agree? Why do you prefer buying LEAPS rather than selling puts outright? If you look at Aug 20 CSX, ($95) the $80 calls will cost you ~$17. The $80 puts go for $.40. The stock can lose well over 15% before I have to 'worry' about going long, annnnnnd, even if I did I will be getting it at a 15% discount from present value whereas you will have $1700 tied up and the stock MUST go up for you to see the first penny of profit. If you are buying, what difference does it make how far below the current NAV you go. You are still depending on a stock move to the upside before you can make any profit. Why not go down to 50%? Lastly,, form your article, LEAPS is just a fancy marketing moniker. It says right there that they are little more than options with long term horizons.


Edit: If you look at the same CSX options except in November, the Calls will cost you just a little more... around $18 while the puts triple in value.

I'm not being argumentative or anything like that, I just don't get the whole buying puts/calls strategy. I find a price that I would be willing to own the stock at, and sell the puts. If it finishes OTM, then YAY. If not, and it's assigned then I start selling calls on the discounted stock. And.. I have money in my account I can put to use elsewhere. In an up market, it prints money. I got hammered a little this week as some options were put to me, but come Monday I will be selling calls.