An old proverb says, “Where there's a will there's a way.”, and we show you how to use a “Super Bull” strategy in an IRA account and not have to fully pay for the short put (which would wreck your ROC and take some underlyings completely off the table). The information here can apply to numerous situations.
An example of a traditional Super Bull was displayed. It consisted of a naked short put plus a long at-the-money (ATM) call spread. The capital requirement for the naked short put is substantial in an IRA account.
An example of the Modified IRA Super Bull was introduced. It’s the same as the traditional Super Bull but we added a long out-of-the-money put to define our risk and reduce the margin requirement.
A table showing a Modified IRA Super Bull using the SPY (S&P 500 ETF) trading at $191.50 was displayed. The table included the delta, number of contract, current price of each option and total credit received.
A question to be answered is why use a Modified Super Bull when we could simply go with a short put spread. A table comparing the pros and cons of a Modified Super Bull versus a Put Spread were displayed.
Watch this segment of “Strategies for Your IRA” with Tom Sosnoff and Tony Battista for the takeaways and the pros and cons of a Modified Super Bull as an alternative when trading with a bullish assumption.
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