Subject: Re: Calls: end of an era?
I'd be interested to hear if you'd still make / are still making this trade, all else being equal, and/or how you'd think about the decision when the math is this close.

I'm, not sure. I'm making it up as I go along.

To date I have been hoping that the economy would crack, and the interest rate forecasts would fall before I have to roll too many at high implied rates.
So I have been partly delaying rolling my contracts, and rolling to dates with shorter expiration dates than usual.
But that has not only not worked, but worked against me recently. Any buying on dips will be of shares, not calls, for now.

I still expect a US recession, but the housing situation seems to have delayed it...a strange hangover from the free money years.
(so many people have locked in low-rate mortgages, nobody wants to sell or can afford to, so there is very low inventory, meaning marginal house price transactions are holding up oddly well, meaning people are still feeling the wealth effect and the banks are still over-optimistic about LTVs...)
I was expecting recession to set in some time this winter, but maybe a bit later now? There are certainly already big cracks showing in the pocketbooks of those less well off.

In any case, I try to remember I'm not borrowing the full amount.
If you buy a call with 2:1 leverage and a horrible 8% implied interest rate, the stock price only has to rise a nominal 4% to cover the "interest" payment and get you to breakeven.

Jim