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Hi Serge,
I read your articles on the milking the cow strategy, and first of all I want to thank you for sharing such a brilliant idea.
I would like to apply the strategy to Tesla stocks.
I am a little worried about an explosion of volatility when the stock will be admitted to the S&P500, but the premiums are very generous.
What do you think about it?
Thank you very much !!!
Aldo -
Hi Aldo,
Yes I think your concern may be well founded. Normally, the milk-the-cow should adapt well even to such events – on average. But you could end up losing money in the specific week in which that listing happens. If you knew in which week or month it was going to occur (do we know that?) you could either a) only to sell puts in that week, no calls or b) sell the call at a much higher strike away from the current price.
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