08-04-2020, 12:07 AM
(08-03-2020, 11:19 PM)NilesMike Wrote: Been doing the same. Sell cash secured puts until you get called, then sell calls against. One thing I'm not sure I understand in your strategy: why are you buying the 55 call? You never really want to sell your shares and while the two puts lose value when share price is 50 you gain money on the one call that offsets it? Or am I gettig this wrong?
It is calls not puts.
Visualize a covered call and a call spread. The 55 call "covers" one of the short 50 calls. Can't have a naked cal in an IRA. The stock covers the other short 50 call.
Collect 2 short call premiums, buy a cheap call above to "cover", collect premium, dividend and possible 10% stock appreciation (less buyback cost of short calls)
In the spirit of educating, you need to tighten up the definitions. When stocks are PUT to you, they are ASSIGNED. When a call expires in the money it is CALLED away. Thinking of it his way will make things more clear for you.
Aaah, much clearer now
The IRA part is unknown to me (greetings from Europe 
) plus now do I understand correctly that in the above example you own 100 shares and not - as I probably falsely assumed - 200?