I will be starting (and hopefully continuing) a thread on my stock buys, sells, and the covered calls I do. I have been accused of clogging up the Option Forum with my boring covered calls over the years. I think the last time I looked, 7% of trades (in the option markets), were from covered calls. Something that is part of the greater picture, but nothing earth shattering for most traders. A bit of my background, then a copy and paste from the Option Forum from my last trades there. I'm 67 going on 68 (Sept). Married for a million years. My wife is involved with every trade we make. I must get her OK or we do not make the trade!! It comes in quite nicely when dealing with what went wrong. I will on occasions make a covered call in my Roth IRAs by myself...But for the trust/general trading, we both have to agree. She has a BA in business, with a college minor in Spanish. I have traded stocks for about 40 years...About 20+ years on covered calls. I am a value/growth investor. Boring stable companies like ADM, Apple, QQQ...Like watching paint dry. Over the years I was a farmer (almonds...but worked cattle with my late father in law [a vet]). I also worked in the family farms in wine grapes and peaches in my youth. I was a Realtor for about 15 years, worked in a call center for a few years. I was a security guard for about 10 years on and off (before Obamacare). The security thing was for medical, dental, and 401K...Be a member of the union and work as little as possible (but keep those benefits)!! Just had to work 24 hours a week (average), to get benefits. I have been a landlord since I was 18. After college (with no job prospects) I fell back into the family farm and bought rentals. My wife and I are down to one rental. Once they move out, we will hand it over to a rental company. I am guessing...About a forth of our stocks are in covered calls (for income). Many mutual fund and owning things like QQQ and just holding tight. I enjoy visiting my kids (grand kids) in CA and Montana. I don't want to deal with stocks/options if I don't have to. Just enjoy the day/smell the roses. That is about it...Also a Christian will morals. But, I'm not tightly wound...I voted Libertarian last time for president (couldn't stand the other choices). Below is the start of my trading thread/journal...Enjoy Three quick trades...Bought 100 shares of Schwab (SCHW) for $60.54 ( I already own 100 shares). I had 100 shares called away a few months ago. The other 100 shares has no option on it. As I am typing I was thinking of FIFO...It didn't even come to mind during this trade. I then did a covered call for the June 24 $65...I got $6.01 for the option. The other option I wrote was for Century Communites (CCS)...We have had this stock for many years. Had (I believe) two covered calls that expired out of the money during this time. Wrote a covered call for the March 24 $95. (two). I got $2.20 ($440.) for the option...Extra income. They do entry level homes... PS I like the little cabin up in the hills for vacation, reflection...Hence Cabin111. But, I am also drawn to the ocean. IT IS NOT FOR THE LOVE OF CABIN SEATS ON THE PLANE!!
%% Good thing with your almond farm back ground=no cherry pickin' IBKR+ SCHW are among the best brokers. Ken likes Fidelity a lot. Cut loss on DIA related , good thing it was somewhat of a start position...... SPY,QQQ closed below 50dma; so SH closed above 50dma, profits on SH trade..... I always got a female opinion on RE investments= common sense
Great way to start a journal!! It's very helpful to know who you are listening to, so thank you for sharing some details of your life. Can you share with us the make-up of your portfolio? I don't want to know how much money you have, or even what stocks, just what kind of diversification you practice.
I'll just list about 40 US stocks/mutual funds I own (some may or may not have options on them). At the end, I'll put about 20 international stocks/mutual funds I/my wife own. Boring boring, preserve capital is big for me... RMD, LAND, SPYG, HTZ, EW, MDT, NUE, PHM, CVS, SYY, TAN, KO, AAPL, TMUS, RING, MATX, QQQ, WELL, ZION, CAR, JBI, XLB, PHO, OTIS, MU, CAG, PFE, TGT, IBM, TSN, CCS, GILD, BSX, SCHW, PRSGX, GGHCX, FSTEX, FSPHX, FPI, BG, TDY, RVT, RMT... We do not go heavy into any one stock/mutual fund...We have learned the hard way on that. International; GMAB, GSK, GNC.AX, CDUAF, BBCA, EWA, THD, FICDX, BRDCY, NVS, FJTSY, EWY, ENB, PGJ, TRYIY, TEVA, IPH.AX, RGT... Royce Value, Royce Micro, and Royce Global are our most widely held stocks...They always come though with their dividend. PS Please invest in any of these...I'll make money. A rising tide...
What kind of drawdown do you experience during something like covid? I'd take a wild guess that your returns are very similar to the index. The covered calls increase the returns to some degree. My experience with covered call is limited and not as good as yours. I found that I missed the surprise up moves as my stocks got called away. Also in a down market I could lose money by having a stock called away at a loss. It was my desire to preserve capital that changed my strategy from buy & hold to trading. It is my desire to get the best return possible that keeps me from over diversifying (10 to 12 stocks max) Gotta go with what works for you. I'll be following your journal. Hope it's successful!!
I am all over on the board on my covered call trades. It's just a feel many times. Sometimes I will just glean the covered call premium money...Hoping the stock doesn't drop. Here was a thread of just going after the high premium. https://www.elitetrader.com/et/threads/bought-100-shares-of-google-today.370619/ Many times if a stock is lightly traded, I can't do a leap. I will just a grab call option that is farthest out...Example March 2024. The other thing I have been doing lately is leaps. If I like the stock, I will do a leap way out of the money. Not much premium, but a little income. I am starting to wise up in that area now. If the stock drops 20% and fundamentals have changed...I will buy back the option and sell the stock for a loss. Glean my long term and short term losses... Just me...
New trades today...Enovis (ENOV). I put in my price days ago...$54.90, last night I dropped it to $54.83. I picked it up for the low...But it didn't show that low on Yahoo! Finance. I just happened to get it for the low of the day in the first hour...When the markets were down. I couldn't sleep well last night...Got to sleep about 7:30am California time. So I checked, and I had picked it up...Just 100 shares. I then did a covered call for the Sept 24, $60. I got $6.00 ($600.) for the trade. This company first caught my eye when it turned up on RVT's top ten holdings. They are into replacement hips, knees, leg wraps, many medical tools. Their earnings came out OK. Royce Funds looks for well run companies...Ones where the management is not bleeding the company dry. Again, it's a value fund. I also like that mainland China makes junk in these areas. If you were in Asia/South America (and you needed a hip replacement), would you want the product to come from the US or China?? The US leads in medical technology... I was going to do 200 shares, but any recalls (think surgical meshes), and this company could have real problems...
Hey @Cabin111 Good to see you having your own journal (smiles/wink) I hope that you're a fit guy, given, that you have been working in security field. Because, if you are, then another 20-40 years to travel, will be but a joke/easy task.
I stopped security when Obamacare came in. I had two health insurance policies (security and private)...Both didn't cover a lot of stuff. Once Obamacare came in, I was free from jumping though a lot of hoops. Once Medicare came in for me and my wife, the world opened up many other possibilities...