<p>I have various kinds of plays as do many and it appears that selling calls is more of a steady income stream. My coworker said that you just sell calls as the price goes down and you get some downside protection. A plunge, of course, would be bad but I’d probably lose some money in a plunge anyways unless I was positioned for it.</p>
<p>I was curious about funds that do this too so I’ll take a look at it.</p>
<p>I think that INTC is good for me as I’ve followed the daily, weekly and monthly action for so long. I know the fundamentals of the company quite well too.</p>
<p>I am just pointing out a couple of major pitfalls…</p>
<p>To you and anyone else that is considering this strategy…</p>
<p>Psychologically…it is very difficult…at least for me…to make …50 a few times trading covered writes and then lose 2.50 as a stock falls out of bed.</p>
<p>I still do the covered call strategy as a part of my portfolio…</p>
<p>The covered call etfs are good way to understand how covered call strategies work…</p>
<p>I personally would not invest in them because… I don’t like fees.
I am a firm believer in trading what you know…</p>
<p>The guy that I am working with on this has explained this to me and he’s told me about what his portfolio has done in small and large crashes.</p>
<p>This year, he’s been called out of a bunch of positions so he didn’t make as much as he could have but he’s more of a slow-and-steady trader than a hot-growth-company investor.</p>
<p>It is a lot easier trying this stuff when you have people helping out.</p>
<p>I traded some Aapl options the last two days…I made small…</p>
<p>I never liked trading options on stocks over 100. It is hard to be short contracts. If I am short a few contracts and the stock moves 5O points against me…ouch…</p>
<p>So…I don’t know how much I will be trading Aapl options in the future…Doesn’t fit my personality.</p>
<p>I haven’t looked back to see what anybody has said but selling covered calls has some risk associated with it. You can get burnt when the stock drops quickly and you want to unload it. Typically you have to buy back the calls first unless you have clearance to sell uncovered calls which is a foolish thing anyways. When a stock is dropping, it is hard to buy back the calls at a good price - the spread seems to get wider and it becomes hard to buy back at a good price. If the stock goes up a lot and the calls become itm, you lose any gains you may have been able to get. Both of these have happened to me. When it looks like I’m going to lose the stock, I typically buy the same amount back without selling any calls so I still participate in the potential gain. You also don’t have to learn how to do this stuff with real money, do virtual trading on cboe.com and try different strategies. If you know how you behave with real money, you don’t need to learn using real money.</p>
<p>S&P500 recorded a total return for the quarter of 12.59%. The S&P 400 Mid-caps returned 13.50%. Apple gained 48%. The Morgan Stanley High Tech index jumped 21.7%. The Morgan Stanley Retail index (trading to a new all-time record high) rose 15.5%. The S&P500 Homebuilding index jumped 31.6%. The German DAX increased 17.8%, Japan’s Nikkei 19.3%, and Brazil’s Bovespa 13.7%. </p>
<p>My total portfolio has underperformed the S&P index because I have some money in bonds and still have a lot in cash. Overall tho, the market gains have helped me a lot this quarter. Should you bail out now? I don’t know. I keep flashing back to 1996-99 when the S&P gained 20% in 96, then 31% in 97, then 26% in 1998 (boy did we get warped expectations!) then “only” 19.5% in 1999 before dropping 10% in 2000. I remember thinking, "who needs hedge funds when unleveraged stock investments can make 25-30% annually? </p>
<p>As for covered calls. I do it, but one of the obvious problems of the strategy over time is you keep losing positions of “good stocks” that go up and keep going up, and you hold onto “dogs” that don’t go up or start going down. So you end up with a bunch of crappy stocks in your portfolio. You do have to “manage” the positions, but that is what happens over time.</p>
<p>If you have a stock that you fundamentally believe in and you get called out, why can’t you just buy it again? If you have a crappy stock, sell it.</p>
<p>I made 20.2% for the first quarter. It wouldn’t be bad to call it a year but apparently April is historically a good month for returns. I will continue to listen to the couple of experts that have been providing me with good calls for the last few years.</p>
<p>Another sign of economic revival…Our parish last year averaged 20k ± per week in the collection plate(not including Ash/palm/Easter or Christmas weeks)…we are now close to 22k, whereas before the downturn we were near 24k…</p>
<p>“As for covered calls. I do it, but one of the obvious problems of the strategy over time is you keep losing positions of “good stocks” that go up and keep going up, and you hold onto “dogs” that don’t go up or start going down. So you end up with a bunch of crappy stocks in your portfolio. You do have to “manage” the positions, but that is what happens over time.”</p>
<p>Yes…that has happened to me…:)</p>
<p>Interesting info on the collection plate…qdogpa.</p>
<p>I think for wealthier people the economy is a lot better.</p>
<p>I was just talking to somebody who owns his own business and deals with the public and he said there are two parallel universes…those that own stocks are doing very well…and he says his customers and other business people confirm this…and then there are the rest of the people.</p>
<p>His wife tried to book a trip in Europe and she was amazed how booked it was.</p>
<p>If you own stocks, you should be happy right now. I don’t know about tomorrow though.</p>
<p>I saw an analysis based on ECRI data showing that we may be in a recession in a few months. Seems a little fast for that but it’s a bit of a red flag to me. There was some other interesting analysis on Bernanke’s comments on growth vs employment.</p>
<p>In my area, the malls are very busy. A new restaurant opened up on the MA/NH border near the mall - Tropical Grill or something like that. The place has a big parking lot and I saw cars parked outside the lot on the road on Friday night. That location is really awful for a restaurant and many have come and go but this one seems to be packing them in regularly. I don’t think that all of the folks going to malls and restaurants are holding onto stocks.</p>
<p>The little pizza place where I get my greek salads and steak tip salads seems to be struggling. There are usually a few people to a lot of people eating there when I pick something up but it has been very quiet there for a long, long time. These guys started when we moved into the area - they support local sports teams, hire local high-school students and are generally all-around good guys in the local community. They are in a good location for the business and factory lunch crowds but there aren’t a lot of homes nearby. Another pizza chain store moved in recently and they may be taking some of their business. I haven’t visited the new place despite it being within easy walking distance. I don’t need another nearby distraction.</p>
<p>I guess we need more statistics and fewer anecdotes.</p>
<p>Lots of reports of violent crime in the areas where you’d expect it on Google News this morning. I was a bit shocked by the volume - something that I wouldn’t expect around this time of the year.</p>
<p>Thanks for the updates. It is bad overseas. Where I live, businesses going out daily but you would never know it if you visit coffee shops. Don’t start clothes shops. Sell food, coffee, and such. That was a recommendation given to me many years ago. People will pay for entertainment, travel, food even in the worst of times, if they can.</p>
Where I live, businesses going out daily but you would never know it if you visit coffee shops. Don’t start clothes shops. Sell food, coffee, and such. That was a recommendation given to me many years ago. People will pay for entertainment, travel, food even in the worst of times, if they can.</p>