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I would like to share ideas. Somewhat new to covered calls but learning . Have done well past few months.Anyone else?
Is this group still active? I make a second living of covered calls. I'd be happy to share ideas and even tell you what I'm doing right now.
MEE, VOD, LVS, USO
Hey yea this is like 5 months after the last post but I am very intereste in covered call writing. I started purchasing stocks with large dividend yields because they were so cheep when the market was down, now that things have rebounded my pool to pick from is much smaller so I have started to purchase outside that category with the hopes of creating a type of synthetic dividend from covered calls. Any thoughts?
Hi all,
I have been trading cc for a couple of years and am happy with results.I would like to share ideas with other cc traders. Anyone else interested?
I have been trading cc for a couple of years and am happy with results.I would like to share ideas with other cc traders. Anyone else interested?
Guys, I am busy trading CC each cycle.
I am looking at RCRC. This is Learning Curve, a toy manufacturer. If you have children, particularly young boys, you know should now know what 'Chuggington' is. This is going to be the biggest hit TV show/toys since Thomas the Train (same creators).
Two plays here. RCRC is the toy manufacurer. And Ludorum is the creator/licensor. LUD.L is only traded on the LSE. There is a pink sheet, but it's not traded.
The Feb 15 calls are $.80 on a $14.80 stock. Very nice return. You might consider buying this outright.
Chuggington is going to be huge.
I am interested in what you all are doing. I am brand new to this. Haven't even done my first option trade yet. I am waiting on my money to get through the 5 day hold. I have been reading and watching webinars about options for a few months now. I am going to start with covered calls. So any advise or suggestions are greatly appreciated.
Welcome LonghornsFan. As for options trading, you are starting in the right place - Covered Calls. This is the safest stock investment out there, including owning outright shares.
To get trading ideas, you might take a look at http://www.callpix.com/.
Call Pix will give you the share price and the 'in the money' option price along with the % return. Some of these trades are very tempting. Especially when you see a 10% or higher return. But a major word of caution, do your due-diligence on the underlying stocks.
The reason you see 10% or higher returns is because of an upcoming event such as an earnings announcement or an FDA approval. Learn what is driving the volatility which is driving the options premium and let that guide your trading.
I like to find stocks with betas in the range of 2. You can find high quality companies that happen to have big trading swings, but you can rest assured that the company isn't going under (if they were to lose a lawsuit for example, or get an unfavorable FDA ruling).
When you find a high-quality company, many of them pay dividends. So the strategy here is to buy the stock and sell way-out-of-the-money calls. A stock might be at $15, so sell the $22.50s. You might only make .20/share. Plan on owning the stock over the long term and collecting that small premium each month + the dividends. It's a great way to create a second paycheck. Telco and insurance stocks pay big dividends so you might look at those sectors for this technique.
Another technique is to look for in-the-money trades. I almost always find a 5-6% return by buying a high quality stock and then selling an in-the-money or at-the-money call. To jack up the return and protect your downside, sell the call that's two months out. Wash-rinse-repeat. Plan on getting assigned at the end of the cycle, but take your 5% and run. If a stock is at $40, sell the $36 call that's two cycles out. I do this instead of putting money in a CD.
By the way, UT sucks! Go SMU!
Thanks for the great info. I will check out the site. Talk to me about SMU when they win a BCS bowl ;)
I have read a lot about options and different strategies, but what is a good source for picking. Not sure if I say picking stocks or picking options. But right now I am keeping my ear to the ground and listen to others suggestions. Where can I learn info on how to pick my own stocks to do covered calls on.
Mr E
I like your method, it's what I have been doing for a couple of years now. I have accumulated a few good div. paying stocks I plan to hold then I sell cc out of the money and add a little extra profit.
As you mentioned I also look for stocks to buy sell ITM CC with all intention of stock getting called away, risk is smaler profit is quick and you move on to the next one.If you pick the right stocks even if market tanks as it has last few days well postioned stocks will come back.
I have discovered a few stocks that I have been able to use over and over, some with div that I end up collecting;
NUE,FLR,MCHP,TEX,MT,UNH
VZ pays a nice div. it seems to roll between 30+ and 33 I have accumulate some and continue to sell cc every month OTM over 33 pick up div and .20 to .25 on cc.
Right now I am looking at TOT buy @ $60.15 sell feb cc @ 60 for $2.10 , $210 profit and the stock gets called away.
Of course we all know the down side is if the stock drops below 60 or worse yet below 58 ( buy 60-2 for cc =58 invested) thats why I think there is less risk in stable co's
I like your method, it's what I have been doing for a couple of years now. I have accumulated a few good div. paying stocks I plan to hold then I sell cc out of the money and add a little extra profit.
As you mentioned I also look for stocks to buy sell ITM CC with all intention of stock getting called away, risk is smaler profit is quick and you move on to the next one.If you pick the right stocks even if market tanks as it has last few days well postioned stocks will come back.
I have discovered a few stocks that I have been able to use over and over, some with div that I end up collecting;
NUE,FLR,MCHP,TEX,MT,UNH
VZ pays a nice div. it seems to roll between 30+ and 33 I have accumulate some and continue to sell cc every month OTM over 33 pick up div and .20 to .25 on cc.
Right now I am looking at TOT buy @ $60.15 sell feb cc @ 60 for $2.10 , $210 profit and the stock gets called away.
Of course we all know the down side is if the stock drops below 60 or worse yet below 58 ( buy 60-2 for cc =58 invested) thats why I think there is less risk in stable co's
Mr.Employment knows what he's talking about http://www.callpix.com/.
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