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+Chapter 25: LEAPS 399 
+Treasury bill and earn interest over the two years that the put write is in place. Even 
+if the T-bill were earning only 4% per year, that would increase the overall two-year 
+return for the naked put sale by 8%, to 32.4%. This should make it obvious that naked 
+put selling is rrwre strategically advantageous than covered call writing. 
+Even so, one might rightfully wonder if LEAPS put selling is better than selling 
+shorter-term equity puts. As was the case with covered call writing, the answer 
+depends on what the investor is trying to accomplish. Short-term puts will not bring 
+as much premium into the account, so when they expire, one will be forced to find 
+another suitable put sale to replace it. On the other hand, the LEAPS put sale brings 
+in a larger premium and one does not have to find a replacement until the longer­
+term LEAPS put expires. The negative aspect to selling the LEAPS puts is that time 
+decay won't help much right away and, even if the stock moves higher (which is 
+ostensibly good for the position), the put won't decline in price by a large amount, 
+since the delta of the put is relatively small. 
+One other factor might enter in the decision regarding whether to use short­
+term puts or LEAPS puts. Some put writers are actually attempting to buy stock 
+below the market price. That is, they would not mind being assigned on the put they 
+sell, meaning that they would buy stock at a net cost of the striking price less the pre­
+mium they received from the sale of the put. If they don't get assigned, they get to 
+keep a profit equal to the premium they received when they first sold the put. 
+Generally, a person would only sell puts in this manner on a stock that he had faith 
+in, so that if he was assigned on the put, he would view that as a buying opportunity 
+in the underlying stock. This strategy does not lend itself well to LEAPS. Since the 
+LEAPS puts will carry a significant amount of time premium, there is little (if any) 
+chance that the put writer will actually be assigned until the life of the put shortens 
+substantially. This means that it is unlikely that the put writer will become a stock 
+owner via assignment at any time in the near future. Consequently, if one is attempt­
+ing to wTite puts in order to eventually buy the common stock when he is assigned, 
+he would be better served to write shorter-term puts. 
+UNCOVERED CALL SELLING 
+There are very few differences between using LEAPS for naked call selling and using 
+shorter-term calls, except for the ones that have been discussed already with regard 
+to selling uncovered LEAPS: Time value decay occurs more slowly and, if the stock 
+rallies and the naked calls have to be covered, the call writer will normally be paying 
+more time premium than he is used to when he covers the call. Of course, the rea­
+son that one is engaged in naked call writing might shed some more light on the use 
+of LEAPS for that purpose.