Is selling covered calls viable? Can it really produce a monthly income? What is the lowest risk strategy?
Should I sell 2 deviations above for the strike and just collect dividends as well since its a pretty low chance of the call being exercised? Should I just fucking dump my money into the S&P?
Any experience/tips would be appreciated.
Deep out of the money is a fine strategy to use long term, or so I have read. Though I've never actually done it.
>>1322368
holy fuck
that image i'm laughing hard
I want to know this too but I think /biz/ might not be the please to ask this
>>1322368
Yeah, it's perfectly valid, but I'd recommend a large amount of stock and limiting yourself to short term contracts.
As long as it's not a hugely bullish asset probably fine. I think sp500 wouldn't be good to write covered calls on.
>>1322482
Thanks mate.
Why just covered calls though? You want to have a few different strategies going on in a few different underlyings to keep things diversified. You want to weave a little web, up, down, left, right, in, out, no matter where the markets go, you catch some fish. And dump some money into the S&P, and some other markets too. Active, passive. Do it all.
Congrats on leveling up to options.
https://www.tastytrade.com/tt/shows/market-measures/episodes/active-trading-vs-passive-investing-01-22-2015
1 std dev has historically been the best risk reward if memory serves.
But Frankly the Covered Put (Short Stock Short Put) is better given current environment IMO.
https://www.tastytrade.com/tt/shows/market-measures/episodes/beating-the-best-05-22-2015
The Covered Call Hedges about 1/3 of your stock position risk. if you compared this to the days when people recommended hedging with bonds b/c reverse correllation its about the same number. Thing is bonds and equities are currently highly correllated and a down move in one = a down move in the other.
With options your hedge is contractually enforced and insured.
How much Capital are you working with?
>>1324373
about 11k USD, in a month ill have around 35k to work with.
>>1324450
https://www.tastytrade.com/tt/shows/top-dogs-50k/episodes/small-accounts-the-core-portfolio-1-of-6-01-20-2016
The Core position is what you're trying to build.
Watch the whole top dogs 4 small accounts for strategy.
A short put is the exact same trade as a covered call, risk wise.
