The Option Trade. The key to this strategy, like most option strategies, is the advantage of leverage. The money to be made is mostly in the premium and the directions movement of the shares while the downside is time limit if the trade goes against the trader. There just needs to be better timing of the trade. With channel lines the obvious trade is selling puts when the price is sitting on the lower channel and selling calls when the price is nearing the upper channel. Similar to the swing trade, this strategy needs to be monitored closely when the price is near the channel lines but it also has to be monitored closely as the option approaches the expiration date. As the option approaches its end date, the premium shrinks quickly and the option trades in sync with the underlying stock so there's less to be gained from the option itself and more to be gained from the underlying stock. That loss of premium may make the difference on whether the option is sold or kept. The trade become more and more stressful as it approaches expiration and it's something to take into account trading options. But if executed correctly and the underlying stock move in the right direction, it can be a very lucrative strategy.
My Strategy Going Forward. Since I'm comfortable trading options and well capable of executing an exit strategy if things go wrong, I expect to execute the option trade. For me the swing trade would cost $11,360 for every round. If the only course of action for some traders is to sell cash secured puts at the lower channel, then this strategy would require that $11,360 be available in case the trade went south. But with a margin account and a little discipline, naked puts and calls can be sold and the leverage becomes obvious. This is, however, a risky trade and shouldn't be performed unless the investor understands all the things that can go wrong. But for me the leverage is an advantage and I'll use the income to actually buy shares of the company. Overtime I'll eventually own shares of this company that was bought with money earned in the market rather than using my own funds. And with those shares I can easily implement a swing strategy.