option2retire

And what kind of spread would you recommend? I also think a bounce is possible, but I also believe that by August the metals will take a final plunge, but I wouldn't be averse to trying to play a bounce. But considering how often I've picked the wrong direction on purely directional trades, I'd like to try something more conservative.

I read about this strategy in a book and just wanted to make sure I have it right. If I believe that, say, SLV will increase in the long term but decline in the short to intermediate term (say over the next 4-6 months), can I use LEAPS to generate income by buying a 2016 call, for example, and then selling shorter-term calls against it? For example, Jan 2016 21 SLV calls are selling for 2.72, so I'd buy this call and then sell, say, a May 2014 21 call and receive .54, and then repeat if that one expires worthless? What are other strategies that I might consider given my belief that in the short term the price could rise, then by midsummer bottom out, and then rise after that?