11-01-2018, 07:39 PM
I should update this thread since I started it. After three months of executing this covered put strategy aggressively, I have seen sideways market, gentle rise and the OCT correction. Even during correction it works pretty well, though I can see how risky it could be if done on margin, which I am not. By following about 5 simple rules I estimate the results that follow. When I disregarded a rule or two the chance of success is cut in half. I would bother to dig the details o my account statements and post more specific info with real numbers if anyone is truly interested enough to read and offer feedback.
Here's the snapshot. Basically two months of options and the last month was a nasty market drop.
-35 total contracts sold, usually one contract, never more than two.
-10 have already expired worthless
- another 10 are likely to expired soon with stocks recovering some.
-I was "forced" to buy ATT-BAC and Abbott, about 5 contracts total, I didn't always like the price but I was willing to buy them anyway before they dropped.
-I made a very quick profit on about 5 put sales on stocks that ran high fast. (MCD-APPL-MMM etc) Those were higher priced put sales. I saw no need to be greedy and wait for them to expire weeks latere Cashed out and move on rather than be greedy. I definitely closed out positions that would have expired worthless anyway with more patience. But the market was volatile.
-Now the bad news. My timing on CVX, XOM, MRO and DPDW was horrible. I took a loss on CVX, MRO and Dupont. I rolled XOM forward to buy some time. UPS will be rolled next. Dupont was a total train wreck on a stock I don't even care to own longterm. I chickened out before earnings and lost more than I should have. I broke my rules on all of these positions.
Yes I did make considerable money and I also cut profits in half breaking my simple rules on just a few stocks. I won;t forget the lesson.
Interestingly enough some of the non-volatile stocks have worked best. I have been trying to buy utilities for two months. Hasn't happened even once yet. Collecting premiums that far exceed dividends so it's a win I guess. Same with pharma stocks. 80% on contracts expire worthless if I sell them on dips. Eventually I'll be forced into gong long which is where I desire to be.
Here's the snapshot. Basically two months of options and the last month was a nasty market drop.
-35 total contracts sold, usually one contract, never more than two.
-10 have already expired worthless
- another 10 are likely to expired soon with stocks recovering some.
-I was "forced" to buy ATT-BAC and Abbott, about 5 contracts total, I didn't always like the price but I was willing to buy them anyway before they dropped.
-I made a very quick profit on about 5 put sales on stocks that ran high fast. (MCD-APPL-MMM etc) Those were higher priced put sales. I saw no need to be greedy and wait for them to expire weeks latere Cashed out and move on rather than be greedy. I definitely closed out positions that would have expired worthless anyway with more patience. But the market was volatile.
-Now the bad news. My timing on CVX, XOM, MRO and DPDW was horrible. I took a loss on CVX, MRO and Dupont. I rolled XOM forward to buy some time. UPS will be rolled next. Dupont was a total train wreck on a stock I don't even care to own longterm. I chickened out before earnings and lost more than I should have. I broke my rules on all of these positions.
Yes I did make considerable money and I also cut profits in half breaking my simple rules on just a few stocks. I won;t forget the lesson.
Interestingly enough some of the non-volatile stocks have worked best. I have been trying to buy utilities for two months. Hasn't happened even once yet. Collecting premiums that far exceed dividends so it's a win I guess. Same with pharma stocks. 80% on contracts expire worthless if I sell them on dips. Eventually I'll be forced into gong long which is where I desire to be.