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Investment Strategies / Falling Knives
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Author: tedthedog 🐝  😊 😞
Number: of 670 
Subject: Re: DG = DLTR
Date: 01/24/2025 5:27 PM
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If you were able to outline, at least in general, his covered straddle w/o violating copyright it would be helpful.

In general, a 'covered straddle' is: holding stock, selling an ATM call, selling an ATM put
https://www.investopedia.com/terms/c/covered-strad....

The "holding stock, selling a call" part is OK, it's a covered call
Selling an additional option, i.e. a put, to get more premium is potentially problematic.
It's a 'naked put' unless you sequester cash to pay for the put in case you get assigned when/if the share price drops.
Maybe he accounted for that, assuming something around 4% in T-bills securing the put, but the article is behind a paywall.

If one wanted to try bullish option strategies on this underlying, then buying a DITM call is a strategy that has been discussed a lot on these boards.
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