09-25-2013, 09:16 PM
With the market being so uncertain, I've been focusing on plays that will generate at least 10% cash flow between dividends and call prices, generally over a six month period. GE generates a bit less, but also IMO carries a bit less risk. INTC been a cash flow hog with its nice dividend and very rich call contract prices. Going further out on the risk scale, AAPL, CCJ, and ECA have provided very nice cash flow, as the call contracts are so rich. I really just sold calls on the AAPL in order to generate some extra cash flow while hoping that calls would take the position out, as I've not been very happy with AAPL management or share price action since accumulating the shares.
I usually ladder in with a few hundred shares at a time, choosing different out of the money strikes and different call dates. The duration is usually picked to give cash flow at least equal to 2X the amount of anticipated dividends. Over the past year, buy and hold would have generally done better, but as part of my defensive strategy, I'm pleased with the results generated by call writing. The portfolio has generated very good cash flow, and has tended to be much less volatile than the general market.
I usually ladder in with a few hundred shares at a time, choosing different out of the money strikes and different call dates. The duration is usually picked to give cash flow at least equal to 2X the amount of anticipated dividends. Over the past year, buy and hold would have generally done better, but as part of my defensive strategy, I'm pleased with the results generated by call writing. The portfolio has generated very good cash flow, and has tended to be much less volatile than the general market.
Alex