You also may blowup and say,hmmm,I should have been better prepared
The harder you work the luckier you get
The harder you work the luckier you get
Another boring covered call I did yesterday...Apple
- Thread starter Cabin111
- Start date
It's a 3.5% return. It only makes sense if you've no intention of selling shares. TBH at your age you should be reducing equity exposure, not increasing it (outside of this call write).
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I have over a million in cash; CDs, money market funds, savings, checking. This is besides my other investments; house, rental, large lot, stocks, EFTs, note and deed of trust, gold and silver coins, cars/truck, ect...
My wife and I have to choose wisely, (in this bull market) what to buy. And like I have said before, we have about a million committed to equities. Only about 10-15% are in covered calls. Some stocks we own outright are things like; TDY, CVS, OMI, IBM, TMUS, THD, GOOD, ZION, CAR, BRDCY, DUK, GILD, VZ, TEVA, BG. I am not even adding the mutual funds (closed end and open end) or the ETFs.
I'm 65 1/2...Lots of money with very little income. Generate SOME income with safety...
If I was 30 years younger, I would look at life differently...
Grown kids (with grand kids). One who is local is not responsible...The one out of the area is. I've had two heart attacks. I feel like I need to treat my investments like a "widow and orphan" situation...
I m sure you've got the trusts worked out. I would convert all of your optionable equity positions into synthetic straddles, but deep OTM. Like a year or two on tenors and 30% OTM on strikes. Anywa, I've run that book with 50% of my net liq for decades.
Sounds good destriero...Who will close/fill your positions if you died or became incapacitated?? If my wife and I die, our accounts get frozen until a judge directs an executor to make/fill the trades. That is how our trust is set up...Not as easy as it sounds. Estate planning is a bear...
Yeah, my oldest has POA now that he is of age. I have a sizable term life policy with Chubb (accel life and terminal riders). You've got an inter vivos?
So here's an example a vehicle to write straddles against. GOOGL closed at 2435. The Jan2023 3000C is 147.xx marketable. Say an 860 credit on the synthetic straddle. So you're long 100 GOOGL and you write 294 in premium ($29,400) against those 100 shares at a vol-line of 26%.
Your stress with GOOGL at 3000 in a year is 460 on the straddle. IOW you'll 400 ($40K) per lot at neutrality ($3000/share). Yeah, you'll make $565/share without the vol, but no way we touch $3,000 GOOGL inside a year.
Say you want less exposure to that ticker. Buy 50 shares and sell one of the 3,000 calls for 147. Same position but half the size.
I haven't calculated my DCA on GOOGL overwrites in a couple of years, but I write every six month tenors and typically roll in month five. My DCA (reinvested prem) in GOOGL from overwriting in 2019 was under $600/share. That assumes I reinvested all premium in the trade, which I do not do. I typically add another ticker.
Your stress with GOOGL at 3000 in a year is 460 on the straddle. IOW you'll 400 ($40K) per lot at neutrality ($3000/share). Yeah, you'll make $565/share without the vol, but no way we touch $3,000 GOOGL inside a year.
Say you want less exposure to that ticker. Buy 50 shares and sell one of the 3,000 calls for 147. Same position but half the size.
I haven't calculated my DCA on GOOGL overwrites in a couple of years, but I write every six month tenors and typically roll in month five. My DCA (reinvested prem) in GOOGL from overwriting in 2019 was under $600/share. That assumes I reinvested all premium in the trade, which I do not do. I typically add another ticker.
I haven’t gotten to this point, but I thought that if you have assets under corporation, it’s easily transferred by making kids shareholders. Real Estate is not easy to transfer to Corp though.