Suggestive Lexicon - Even More Interesting Tactics

I'm talking here about being naked and legging in and out.  Don't get carried away - I didn't make these up, I swear!

I love to sell naked puts.  That is, in fact, my favorite strategy.  But I also love Bull Put Spreads.  Let's see what I did with AAPL.

When AAPL was trading around $500, I sold to open (STO, in the jargon) a 2014 LEAP put at a strike of $450.  When AAPL rallied after earnings, I bought back that put to close (BTC) for a profit, and rolled out to 2014 $500 strike.  When AAPL again rallied, I "covered" this naked put with a long put by creating a Bull Put Spread - I bought to open (BTO) a 2014 $450 put.  In time, AAPL has continued to defy gravity, rising ever more, and I have been keeping a keen eye on my short puts.  With the imminent launch of the iPad 5 in September 2012, my $500 expiring in 2014 put had before very profitable.  I therefore placed a trailing stop of $2 to buy it back to close, in order to secure my profits.  I kept my long $450 put intact, in case the stock rallies, and then takes a tumble as other traders also take profits.  In that event, my long put would increase in value.

Here is what I love about Bull Put Spreads: As the name implies, you put those on with a bullish expectation on the underlying stock.  But with Bull Put Spreads, you needn't be all that bullish - just bullish enough.  One of the benefits of doing Bull Put Spreads is that you are getting money into your account immediately, because these spreads are credit spreads.  Another benefit is that, if the underlying stock tumbles significantly, your long put becomes profitable, and when that happens, I like to sell it for a profit, thus "legging out" of the spread.  I took a credit to begin with; I'm now selling the long put at a profit, thereby taking in more money; and I'm leaving the naked put in place with the expectation that the stock will recover.  Such was the case with CMG.  It had gone from about $340 down to $285, and then stabilized.  At that point, I wrote a Bull Put Spread expecting the stock to find its legs again.