Covered call trader here...Doing a lot of leaps

C

Cabin111

Hi, I am starting to rethink what I am doing. I do the leaps...Usually up to 13-14 months out. I never go any longer. I want to be flexible with my stocks somewhat...So I stay at that time period. I also do shorter periods on my calls too. To me, it just seems that I may be better off not having my options expires the third week in January. Many times when the stock expires I don't want to commit to a lower price option.

I am older (63+). I don't want to do straddles, butterfly spreads, ect. I buy industry leaders mostly...Boring mature companies (think Walgreens, ADM). I will buy back a call from time to time. So here is the question...Just wondering if I would be better off having my expire dates not be in January or on the triple witching months? Do shorter periods (6-8 months out) and not have the stock expires on those (somewhat) major days. Thoughts? I know I am on the opposite side of most of the traders here on this thread. Would like to hear your input. Thanks, Brian
 
hi old fart i'm 62 and trade futures - short period for me is about 1 minute in a trade. if i had a trade on for 6 months i think that's being an investor.
 
Yeah, covered calls are the most boring out there. Think of buying QQQ at $149.? and optioning the Jan 2020 for $150. I would get over a 10% return if it got called away. It's like hedging investments for the long haul if we fell into a recession...

I would still own my QQQ if it expired...
 
theta works best with 3 months in the future ... something you might consider ... you could do 4 times a covered call in that time and even have you adjust your strike ... But I have to admit there's no hard and fast rule for something like this. With the current correction I'd prefer the 4 times 3 months out option selling.
 
cvds16 said:
theta works best with 3 months in the future ... something you might consider ... you could do 4 times a covered call in that time and even have you adjust your strike ... But I have to admit there's no hard and fast rule for something like this. With the current correction I'd prefer the 4 times 3 months out option selling.
More...

Yes, I see where you are at. I should mention I am at Schwab and Fidelity (Yeah, I know boring and costly...$5-6. per trade). But like I said before...Industry leaders in discount brokers (they answer the phone). We have 3 accounts at Schwab (2 Roth IRAs and a regular) and 2 at Fidelity (1 Roth IRA and a regular). It can add up with the fees. Just saying...
 
You must log in or register to reply here.
Back
Top