<p>DrGoogle, And how much are the stocks up in that account? Forget the calls?</p>
<p>The stocks I had were CSCO, HPQ, MSFT, XRX, SJR, INTC, MU, JD I think the stocks are usually up 10-20% except for HPQ, possibly MU, and were called away. Also had some short term trades and made money. I think I made almost 100 short term trades and only lost 4 trades, IIRC. </p>
<p>dstark, I apologize by going by my memory because my computer seems to not be working, I can’t open the Xcel spreadsheet, something about Microsoft update gone awry.</p>
<p>I think you are a pretty good stock picker and you traded very well.</p>
<p>A portfolio of covered writes does not return 30 percent a year too often.</p>
<p>The premium for the covered writes must be a nice premium, at least 10% of the stock price. I didn’t trade often on this one because I was waiting for the stocks to be called away so I can move my money to the Optionsfirst, which where I want to do longterm purchasing/trading. The Scottrade account was only small and temporary. I was inactive for a lot of time.</p>
<p>I dont think the option premium equaled 10 percent of the stock price…</p>
<p>I traded msft and intc options…</p>
<p>Without my spreadsheet which is where I kept all the information. Maybe it was not monthly. More like 3-6months. I started Sep 2013 on this account, they were called away in July 2014, but I don’t remember when I bought them.</p>
<p>That’s ok…</p>
<p>You really picked well and you traded fantastically.</p>
<p>There is a reason doct is not a fan of covered writes. He is a pretty smart guy. </p>
<p>PBP is a covered write etf.</p>
<p>It is tough to make large returns with covered writes. We had a huge rally. This etf probably would have done better if the options were longer term and more out of the money…</p>
<p>Still…</p>
<p>You can check out 2 year and 5 year returns too…</p>
<p>One of these links should work.</p>
<p><a href=“PBP Interactive Stock Chart | Invesco S&P 500 BuyWrite ETF Stock - Yahoo Finance”>PBP Interactive Stock Chart | Invesco S&P 500 BuyWrite ETF Stock - Yahoo Finance;
<p><a href=“SPY Interactive Stock Chart | SPDR S&P 500 ETF Trust Stock - Yahoo Finance”>SPY Interactive Stock Chart | SPDR S&P 500 ETF Trust Stock - Yahoo Finance;
<p>As I think I posted above, I think covered calls do better in a flat market-- or at least for shares that tend to trade within a fairly narrow range. You want enough movement in the stock to drive up the option premium, but not enough to risk big surprises. The only money to be made is the time value. </p>
<p>If there’s a good chance that the stock is going to be making a big move in any direction, then I think that calls simply limit the potential profit and possibly create a greater risk of loss than simply holding the stock. There are option spread strategies that are good if you can anticipate the timing of that sort of move- I just don’t think covered call is one of them. </p>
<p><a href=“Covered Calls For Income Can Cost Dearly In Long-Term Gains (NYSEARCA:PBP) | Seeking Alpha”>Covered Calls For Income Can Cost Dearly In Long-Term Gains (NYSEARCA:PBP) | Seeking Alpha;
<p>“So what does this mean for the average investor? You should heed the word of experienced options traders who will point out that performance of a buy-write portfolio will be dominated by the price of the underlying stock or index. Wily traders describe premium income as ‘picking up coins in front of a steamroller.’ If the price falls sharply your premium income seems pretty modest. If the price rises sharply you’ve little to show for it.”</p>
<p>“Consider more sophisticated strategies such as spreads, condors, and butterflies to more carefully control gains and losses.”</p>
<p>Thanks for the article - it pretty much says the same as I said: “Write calls only against shares where you do not expect big gains”. </p>
<p>Though I’d amend that sentence to also say “or losses.” </p>
<p>well - duh! But what we expect and what occurs can be entirely different. If what we expect to occur actually always happened, we’d all be wealthy.</p>
<p>:)</p>
<p>I usually do covered writes when I buy the stock and it drops a little bit. Kind of like t. :)</p>
<p>I also like doing them in lower volatility stocks that pay dividends. I do not like doing them in higher volatility stocks or stocks that might get taken over. </p>
<p>Volatility has not been an issue for awhile, but if I am trading a stock that usually has a 15-20 volatility and the market gets crushed, the decline in the stock is not company specific, and the volatility of options is 40, covered writes are a little more appealing. </p>
<p>Also…you dont have to have a position in a stock that is only a covered write.
I have a covered write in t, but I am also long stock, could have other spreads on or could be long baby puts. Sometimes I am short a strangle…depends on…how I feel. :)</p>
<p>A covered write can be a way of averaging down. If I want to to buy some vz at 47 for instance, I may have a 47 covered write on…I either buy vz at 47 if the stock drops or collect the premium and maybe even a dividend.</p>
<p>The issue is…do I want to own vz at 47? </p>
<p>I am just using VZ as an example. :)</p>
<p>“well - duh! But what we expect and what occurs can be entirely different. If what we expect to occur actually always happened, we’d all be wealthy.”</p>
<p>That’s for sure. If only we knew the future, we would have some amazing portfolios. Actually, if only I hadn’t sold all my stocks way too soon, I’d have an amazing portfolio.</p>
<p>Talking about knowing the future, anyone have some ideas about good stocks to invest in now? I have some freed up cash, looking to invest in a stock. Can’t find anything that looks good.</p>
<p>VZ is my most volatile stock. I have big stake on a few good stocks and they are doing well, but I’m not going to list them here in case I jinx my good luck. :D</p>
<p>Vz is your most volatile stock? VZ has a beta below 1.</p>
<p>I didn’t realize that vz was a particularly volatile stock. By the way, if you list all your stock, we’ll all buy them and their price will skyrocket from such heavy demand and you can retire immediately!</p>
<p>It’s volatile because it has gyrated more than I expect it to be, up and down. I didn’t look at the Beta.</p>
<p>Vz has been a little volatile in the last month but the stock is already calming down…</p>
<p>The definition of volatility is not expectation. ;)</p>
<p>Well you think people buy VZ for the 4+% dividend or whatever, the stock should be reasonably stable, but it has not been.</p>