you mean you can't just put your money in do some stupid routine of selling calls without analyzing stuff and get paid? haha i wonder if an strategy that sold puts only at a certain vix level.... and then sold calls once put the index would do any good.. to bad theres not options on that index.. then you could theoretically overwrite without margin no?
Covered Calls
- Thread starter EnglishTeach
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you mean you can't just put your money in do some stupid routine of selling calls without analyzing stuff and get paid? haha i wonder if an strategy that sold puts only at a certain vix level.... and then sold calls once put the index would do any good.. to bad theres not options on that index.. then you could theoretically overwrite without margin no?
Even with the max link clicked (about 7 years) you are comming out 20% better off with a 'blind' CC startegy than with buy and hold. YES the advantage for the CC strategy is gained during the 'BIG DRAWDOWN". I don't think that's inconclusive at all.
Actually, as anyone who reads my thread knows I don't do covered calls except in very rare situations... e.g. after being put on an agressive short put.
The reason is I don't hold stocks... even stable stocks like GIS. I don't trust the market enough to do that.
Now I say 'blind CC strategy' since we are talking about doing the entire S&P500 without discrimination.
Presumably you could do much better still by choosing a 'better stock' subset... whatever that may mean. (John Bogle not withstanding).
Actually, as anyone who reads my thread knows I don't do covered calls except in very rare situations... e.g. after being put on an agressive short put.
The reason is I don't hold stocks... even stable stocks like GIS. I don't trust the market enough to do that.
Now I say 'blind CC strategy' since we are talking about doing the entire S&P500 without discrimination.
Presumably you could do much better still by choosing a 'better stock' subset... whatever that may mean. (John Bogle not withstanding).
Dan Shirley,
WTF?
You seem to be arguing that I've done some hatchet job on CCs. As I pointed out before you have misinterpreted my intent.
I don't disagree with anything you've said and nothing you have said contradicts anything I've said.
To repeat myself (nearly to the point of ad nauseum), my primary motivation was to show that 4-8% returns per month are bunkum.
What you have posted confirms that.
Now if what you really want is a pissing contest, let's pick a different topic.
WTF?
You seem to be arguing that I've done some hatchet job on CCs. As I pointed out before you have misinterpreted my intent.
I don't disagree with anything you've said and nothing you have said contradicts anything I've said.
To repeat myself (nearly to the point of ad nauseum), my primary motivation was to show that 4-8% returns per month are bunkum.
What you have posted confirms that.
Now if what you really want is a pissing contest, let's pick a different topic.
THe spx return on that chart doesn't include dividends (2%/year). So you should add approximately 14% to the SPX earnings making the returns closer.
In bloomberg: if you invested in SPX (with dividend reinvesting) you did slightly worse than BXM over 25 years (about 10% over the entire period - 860% ish vs 870% ish). This is almost rounding error. However, I wager that you will do better in practice as I am not sure the BXM includes dividends you would realize had you been long SPY and buywriting consistently.
I think the real return is closer to 1%/year above the market. But for this you generate a lot of taxable events which could be disasterous if not managed properly.
great points.
wayneL
You are right. I've just been aggravating you for fun. Kind of the Socratic method. At least we both got to remember why we believe what we do.
I'll go back to my thread now.
You are right. I've just been aggravating you for fun. Kind of the Socratic method. At least we both got to remember why we believe what we do.
I'll go back to my thread now.