What's Your Plan ?

[hendi_alex]

Do you mean a book? I haven't read an in depth publication, but rather pulled from many sources via the internet. My methods are very amateurish and probably shouldn't work, but for the past couple of years, they have met my objectives of generating a target amount of cash flow over a certain time period. You would probably get a good answer to your question if posted on the Income Investing board at Investor Village.

I would suggest, that just starting out, only sell covered calls, never naked calls. Only sell puts for shares that you 100% would be o.k. with owning. Avoid buying calls or puts until you gain confidence in selling each. The least speculative form of options is selling covered calls or selling cash secured puts. I mostly use options to sell calls to juice the cash flow of an existing position, covered call. Occasionally I'll sell puts in an effort to buy a stock of interest at a lower price than is currently available. I've dabbed with buying calls, but thus far have had no degree of success, basically coming out even or slightly down over all.

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[Robandcindy2]

(04-14-2014, 09:14 AM)hendi_alex Wrote: Do you mean a book? I haven't read an in depth publication, but rather pulled from many sources via the internet. My methods are very amateurish and probably shouldn't work, but for the past couple of years, they have met my objectives of generating a target amount of cash flow over a certain time period. You would probably get a good answer to your question if posted on the Income Investing board at Investor Village.

I would suggest, that just starting out, only sell covered calls, never naked calls. Only sell puts for shares that you 100% would be o.k. with owning. Avoid buying calls or puts until you gain confidence in selling each. The least speculative form of options is selling covered calls or selling cash secured puts. I mostly use options to sell calls to juice the cash flow of an existing position, covered call. Occasionally I'll sell puts in an effort to buy a stock of interest at a lower price than is currently available. I've dabbed with buying calls, but thus far have had no degree of success, basically coming out even or slightly down over all.

http://premium.investorvillage.com/smbd....=6536&pt=m

Alex,

Thanks! The guy I'm flying with this month sells covered calls to the tune of $12,000 a year. Really an amazing "insurance" process if you keep it safe sell for the price you'd be comfortable getting for your shares.

I'll check out that link. I saw the Talking Heads on CNBC offering a guide but wasn't sure if it was the same thing. Thanks again.

[hendi_alex]

My current batch of calls brought in $13,062 and that is for about a half year and is on an under $300K portfolio of which about $75K is not used for covered call plays. So the portfolio brings in about $24K-$28K in call income and brings in another $12K-$15K in dividends. I add those two categories together to get my cash flow yield, which for the past couple of years has been well into the double digits. That said, during this sharply rising market, total return would have been much higher without the call writing. Given my urge to play defense, the covered call route worked best for me, giving a solid return plus an extra margin of safety. Playing defense most always causes one to under perform a rising market.