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I dunno if these are the ideal conditions for covered calls unless you’re certain you want to take a loss on your losers as the likelihood of your stocks being called away are pretty high, especially if there’s a massive rally this month.
 
hi all
i write covered calls on stocks i purchase just for doing so , i do it on a revolving basis always selling dtm option to start with so that i have some downside protection but still receive a premium

if the underlying price rises i leg in to buy another lot then write again over these . over a period of a month may leg in three to four times . i receive my premium and if the stock is called away i have still made profit then start all over again. maybe the same stock maybe another

i do not become emotionally involved with the stock they are purely an income producing stream and i treat it as a business and have a tight plan that i stick to just as if i was running a real business of any other kind

only downside is the capital required thats why usually write deep in money so that at end of month have cash back in bank in case need for something else

thru comsec i beleive it takes 24 hours to have stock released from colateral before they can be sold on market again
 
jackson8 said:
hi all
i write covered calls on stocks i purchase just for doing so , i do it on a revolving basis always selling dtm option to start with so that i have some downside protection but still receive a premium

if the underlying price rises i leg in to buy another lot then write again over these . over a period of a month may leg in three to four times . i receive my premium and if the stock is called away i have still made profit then start all over again. maybe the same stock maybe another

i do not become emotionally involved with the stock they are purely an income producing stream and i treat it as a business and have a tight plan that i stick to just as if i was running a real business of any other kind

only downside is the capital required thats why usually write deep in money so that at end of month have cash back in bank in case need for something else

thru comsec i beleive it takes 24 hours to have stock released from colateral before they can be sold on market again
Click to expand...

Just a thought, why don’t you write a short put instead of buy/write covered call, therefore tying up less capital, not a recommendation just wondering why one and not the other.

cutz.
 
jackson8 said:
thru comsec i beleive it takes 24 hours to have stock released from colateral before they can be sold on market again
Click to expand...
They can do it over the phone and place the order for you straight away. If you're nice, they still only charge the online rates. Have done so a number of times myself.
 
cutz said:
Just a thought, why don’t you write a short put instead of buy/write covered call, therefore tying up less capital, not a recommendation just wondering why one and not the other.

cutz.
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will have to apply for level 3 or 4 options trading to do so

i balance my trades between otm , atm , itm to cover all contingentcies i like picking up the extra cash when a otm call is crossed and excercised therefore receiving extra on the share itself
 
cutz said:
I dunno if these are the ideal conditions for covered calls unless you’re certain you want to take a loss on your losers as the likelihood of your stocks being called away are pretty high, especially if there’s a massive rally this month.
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cuts the only time you are gonna get exercised is if your option goes ATM (which is rare) or ITM (they will make a profit). It would be stupid for the individual to exercise and option to lose money (although it can happen from time to time).

For people that are simply buying and holding (longer term) simple option strategies like covered calls can offset losses as mentioned earlier and also protective puts (downside hedge). Short term trading is a little different
 
jackson8 said:
will have to apply for level 3 or 4 options trading to do so

i balance my trades between otm , atm , itm to cover all contingentcies i like picking up the extra cash when a otm call is crossed and excercised therefore receiving extra on the share itself
Click to expand...

Do you also vary your expiration dates?
Furthermore have you considered purchasing a deep in the money call instead of stock - creating a diagonal spread

This would help reduce your margin requirements
 
mazzatelli1000 said:
Do you also vary your expiration dates?
Furthermore have you considered purchasing a deep in the money call instead of stock - creating a diagonal spread

This would help reduce your margin requirements
Click to expand...

i normally go month to month . the annual return is higher and the short time span gives me more control over my money
 
jackson8 said:
i normally go month to month . the annual return is higher and the short time span gives me more control over my money
Click to expand...

So your risk is concentrated on one particular month each time. Diversification comes in the form of different strikes for different levels of downside protection
 
mazzatelli1000 said:
Do you also vary your expiration dates?
Furthermore have you considered purchasing a deep in the money call instead of stock - creating a diagonal spread

This would help reduce your margin requirements
Click to expand...

are you refering to what i know as a call bull spread

if so requires me to upgrade options tradeing account to level 3 or 4 comsec not to helpfull with this even though have been tradeing shares with them for 8 years now

are you aware of other tradeing accounts which are less restrictive , would be happy to use a strategy with less risk. but have been with comsec 9 years and havent really bothered to look around for others.

regards
 
jackson8 said:
are you refering to what i know as a call bull spread

if so requires me to upgrade options tradeing account to level 3 or 4 comsec not to helpfull with this even though have been tradeing shares with them for 8 years now

are you aware of other tradeing accounts which are less restrictive , would be happy to use a strategy with less risk. but have been with comsec 9 years and havent really bothered to look around for others.

regards
Click to expand...

Apologies, I should have been clearer - the deep ITM call would have been longer term (basically substituing the stock itself as its delta would be very close to 1)than your short calls - making it a diagonal spread, whereas the call bull spread means both options expire at the same time.

I would suggest Interactive brokers, and maybe optionsXpress as they are less restrictive and commissions are much lower than that of Commsec.

There is also the option of entering covered calls and various other spreads as one order, instead of legging in like you would at Commsec, which could mean poor execution.
 
mazzatelli1000 said:
Apologies, I should have been clearer - the deep ITM call would have been longer term (basically substituing the stock itself as its delta would be very close to 1)than your short calls - making it a diagonal spread, whereas the call bull spread means both options expire at the same time.

I would suggest Interactive brokers, and maybe optionsXpress as they are less restrictive and commissions are much lower than that of Commsec.

There is also the option of entering covered calls and various other spreads as one order, instead of legging in like you would at Commsec, which could mean poor execution.
Click to expand...

thanks for that
i will check out optionsxpress and look at your recommendations as above, anything that may give us an upper hand should not be discounted.
 
Haha, now it's obvious I edited my original post and changed "funny" to "interesting". In reality, it would've been pretty disheartning for newbie option traders with $$ signs in their eyes aiming to retire by writing bull put spreads last year.

Saw an ad on TV the other day for Safety in the Market. Made me think that spruikers will now be back in force to replenish their ranks by telling new people who have lost money, "Now, if you had followed our system ... " :rolleyes:
 
sails said:
"Now, if you had followed our system ... " :rolleyes:
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...you would write bear call spreads!!!
40-50% returns per month!!!!

Some say it isn't possible, but isn't it always those who can't do it that say that??
Snap out of your rut and start believing in yourself!!!
YOU CAN DO IT!!!

HALLELUJAH!~~~~!!!!:engel:
 
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