Writing Covered Calls

[DividendGarden]

Does anyone write covered calls on shares they own?  I did it many years back but stopped because I felt it was time-consuming.  I've been thinking about getting back into it and just wondering if others do it.

[NilesMike]

Yes, I typically write covered calls when underlying is <200DMA. Helps take the sting off a down move.

When >200DMA I sell puts. Won't limit upside in an uptrend, if the stocks are PUT to me, it's at a good price (pullback) in an uptrend.

Helps smooth out the portfolio volatility.

[crimsonghost747]

I've been experimenting on a covered call strategy, though it involves me always buying the shares in question at the same time as I sell the option. So technically I'm not touching my long-term portfolio while doing this, instead I've got a fixed amount of cash I use the buy the shares with.

So far it looks promising but I'm waiting until I've got a full year of doing this behind me. Then I'll crunch the numbers and see how I did, and decide if it's worth continuing.

[NilesMike]

(12-01-2017, 06:13 AM)crimsonghost747 Wrote: I've been experimenting on a covered call strategy, though it involves me always buying the shares in question at the same time as I sell the option. So technically I'm not touching my long-term portfolio while doing this, instead I've got a fixed amount of cash I use the buy the shares with.

So far it looks promising but I'm waiting until I've got a full year of doing this behind me. Then I'll crunch the numbers and see how I did, and decide if it's worth continuing.

In a bull market it will lag the market, in a bear market it will outperform the market for a more consistent return.

[ChadR]

I occasionally do it. Right now I just have one covered call outstanding. T at $40 for Jan 19, 2018. If T does get called, I'll sell a put. This gives a little extra income to the account. I only do it in retirement accounts since the taxes can be a killer in taxable accounts.

[DividendGarden]

(12-01-2017, 07:16 AM)NilesMike Wrote: In a bull market it will lag the market, in a bear market it will outperform the market for a more consistent return.

That's my thoughts, and I usually only do it in a bear market.

[NilesMike]

Selling JUN15 85 PUT PG
Selling JUN 15 65 PUT EMR
Selling MAY 18 85 PUT GPC

PG and ENR will net > greater than 2 dividensd would
GPC-shorter term- equivalent $ per day as the dividend would be with much lower risk as stock is trading @97.50