Another boring buy and covered call...Citi (C)
- Thread starter Cabin111
- Start date
Long story...I've shared it tons of times here. I'm 66 1/2...Two heart attacks. If I became incapacitated, I don't know if the trust department at the bank will fill/clear my trade positions. Also have a ton of cash...Think business person who sold out their business and retires...Paid the taxes and has cash everywhere. Looking for cash flow, not home runs...
I guess you would call me a value investor. I'm a cross between a long term investor and a widow and orphan investor. Nothing wrong with it...In each season of life you adapt and adjust.
Also commissions are diddly/squat to me. I remember in the 1970's-80's paying over $80 to $100. in commissions at Morgan Stanley!!
I'll grab the option/dividend money and invest is something just as boring. Having money sitting in a money market fund at this time, is like a hot potato!!
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I just started doing sell put options this year and I have to say I don't think I'll ever trade a different option again. So far all of my sell puts have been successful. I don't get much credit for them but the ones I did have added up. I'm focusing on sell puts that are far from the stock price that if I had to buy the etf I wouldn't mind owning it at the levels I'm selling the put for.
Good luck on your trade. I sell premium around my positions but usually I'm short puts and calls via straddle or strangle. October is pretty far out. I think you will find most premium sellers prefer selling under 90 days for faster decay. I usually am looking 14-45 days out. I can't remember the last time I sold more than 60 days out. Just food for thought. We all trade differently.
He's not looking for theta decay. He's looking for income from premium, dividends and possible price expansion.
2 trades instead of 9 per year.
sure, but why not sell more often to earn more premium... that is what premium sellers do and they do that buy burning theta.
Ok, I will agree that 2 trades instead of 9 is easier but it does not earn as much premium.
Ok, I will agree that 2 trades instead of 9 is easier but it does not earn as much premium.
Cool. You are right... it works for him. Different strokes for different folks.
I use to do leaps!! But with inflation, I am less likely to make that move.
Here is an example I might do, if I don't really love the company I am buying.
We'll stay with Citi (C). I could have bought it below $55 within the last month...Say $54.80. I would then sell the Jan 24 $55. for a large amount...Say $8.00 ($800) a few minutes after the buy. Do I really care if it goes up to $90.?? Yes and no...Am I looking for appreciation? No...Just income from the solid dividend and the option money...Which will be reinvested while I wait for the option to either expire or get called away.
I know it sounds like inverse thinking, but I am comfortable with it. Owning a solid company, good dividend, option money and a company I would not mind holding during the middle of a recession (Jan 24). For me, this works as someone who has a lot of cash and is willing to hold good companies during a down turn...
Here is an example I might do, if I don't really love the company I am buying.
We'll stay with Citi (C). I could have bought it below $55 within the last month...Say $54.80. I would then sell the Jan 24 $55. for a large amount...Say $8.00 ($800) a few minutes after the buy. Do I really care if it goes up to $90.?? Yes and no...Am I looking for appreciation? No...Just income from the solid dividend and the option money...Which will be reinvested while I wait for the option to either expire or get called away.
I know it sounds like inverse thinking, but I am comfortable with it. Owning a solid company, good dividend, option money and a company I would not mind holding during the middle of a recession (Jan 24). For me, this works as someone who has a lot of cash and is willing to hold good companies during a down turn...
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