X1 Trade (concept from Jeff Mcalister

I am new to this group today, and have a few thoughts on the X1 as
well as a paper trade for the strategy:
A few recomendations to better soften the edges of this trade:
1. trade an index ETF like QQQQ, IWM, DIA, SPY
They don't have the extreme volatility or gaps like some individual
stocks, b/c they are diversified vehicles
They have extremely rich liquidity trading 50-200+ million shares a
day = (tight bid/ask)
They trade in $1 strikes
No earnings to worry about (enables you to short options in every
month)
Decent extrinsic values OTM to sell

2. instead of the naked strangle or "envelope" place twice as many
contracts of an iron condor to avoid the naked risk. placing twice
as many contracts of Iron Condors as the underlying should bring in
close to the same credit as the short strangle without the naked risk.

*Another positive thing to note, appears when you disect the trade:
Long stock with Long put, synthetically you are
holding a Long call or in this instance a LEAP long
call. This position or synthetic position carries
high positive volatility/vega risk, (vega decreases LEAP value
DECREASES... )
When you add a short strangle or iron condor to the
trade you will be carrying a short vega risk. When you
combine the two positions you have a more diversified
vega risk; slightly positive vega overall, and as time
passes the positive vega of the LEAP will slowly diminish
bringing the vega risk closer to neutral.

Trade example with adjustment:
I placed a paper trade on the QQQQ with a slightly diferent
application of X1 trade:
entered trade 11/20/07
buy 100 shares QQQQ at: 50.55 debit
buy 1 Jan10 Leap 60 put at: 11.87 debit (2.57 extrinsic value/risk of married put postion)
sold 1 Dec 47 put for: 0.53 credit
sold 1 Dec 52 call for: 0.82 credit
sold 1 Dec 52/55 bear call for: 0.67 credit
basic Jeff Mcalister application with one extra bear call thrown in.
(at this point carrying naked risk up/down)

11/27 adjusted trade to protect naked downside risk:
sold 1 Dec 46 put for 0.48 credit
buy 2 Dec 43 puts for 0.15 debit (extra contract to cover my short 47
put; leaving me with a 2 contract bull put with 46&47 as the shorts
and 43 as the long.)
(after adjustment carrying naked risk to the upside but still very
tolerable, as of today, if QQQQ rally 10% and break all time highs,
still only down $250...
Also note that if my Dec options/shorts expire worthless I will have
brought in 2.20 credit. This ellimantes all but 0.37 extrinsic value
of the LEAP long put. Leaving me with virtually a risk free position
on the QQQQ after one month.