Anyone know a good covered call service
- Thread starter 64c2
- Start date
Call girls are not the answer.
Why look for a service? Be your own service and look for the following situations:
1) A high IV skew in either the current or next succeeding month. (This is the most important criteria. It's great to sell Calls to people who don't know they're overpaying.)
2) A low priced stock (7-15 is my favorite wheel house)
3) A stock that has a Fundamentally sound Balance Sheet. (A company with a small amount of debt compared to its assets, is just not going to go belly up.)
4Q
1) A high IV skew in either the current or next succeeding month. (This is the most important criteria. It's great to sell Calls to people who don't know they're overpaying.)
2) A low priced stock (7-15 is my favorite wheel house)
3) A stock that has a Fundamentally sound Balance Sheet. (A company with a small amount of debt compared to its assets, is just not going to go belly up.)
4Q
Donnahuedc, I agree with the synthetic equivalence. But the initial posting in this thread was asking for covered call finding sources. I merely offered an alternative to paying for such information.
But since you brought up the synthetic equivalence, let's get into the question of which is better. My preference is the covered call write under the conditions I mentioned. Since I'm looking for IV spikes, logic tells me that one would be willing to pay a higher premium when purchasing a Call than purchasing a Put because with such a Put the profit potential is limited.
4Q
But since you brought up the synthetic equivalence, let's get into the question of which is better. My preference is the covered call write under the conditions I mentioned. Since I'm looking for IV spikes, logic tells me that one would be willing to pay a higher premium when purchasing a Call than purchasing a Put because with such a Put the profit potential is limited.
4Q
No need. They're the same. Hence the word equivalent.
I wasn't trying to suggest that your ideas were wrong, just point out that he shouldn't play with fire until he understands what he is doing.
Actually, if I were going to trade such a strategy, I would prefer the puts.
In Jack Schwager's book " Stock Market wizards" I believe it was the trader Amet Okumus who traded in a similar manner.
I also remember a trader on an old thread here using a similar strategy and claiming to make about 15%/month.
I think with diversity, good stock picking, and conservative money managment these types of systems can be profitable.
It has been my experience that IV tends to spike in the stock markets with drops in the value of the underlying.
The total value of your position consisting of long the underlying stock and short the call should be the same as your position if you are just short the put ( adjusted for expected dividends and interest rate on the carry ) no matter what the IV or price of the underlying does.