So often when I have money laying around in a money market fund, I would buy 100-200 shares of RING (gold mining companies). I get a fair dividend and would do covered calls just out of the money for income. Most of the companies are in safer (stable) areas...Think Canada or Australia (not much in South Africa). I am looking for cash flow and income. I could just sit on these shares (500) and wait for gold to go up 10-15%, then do more covered calls (sell to open). Or...Do covered calls now, (way out of the money) for a small income generation. Yeah, I know gold could drop also. So my question is (day traders this may not apply to you), should I option these share for say the Jan 22 $32. and get $50. for each option or wait for a 10-15% rise and then do the covered calls?? It's...Do I generate a small amount of income now, or wait a few days or months to see if gold miners rise then do a higher price?? Taxes do NOT come into play for me and my wife...Low income (many assets) and some of these are in ROTH IRAs. I do plan on holding this stock long term, unless it gets called away. If it gets called away, I will wait 30 days and buy some more. If money market funds rise above 2%, I will rethink my strategy. Thoughts...
Nothing exciting...I sold two options for the Jan 22 $32. I got .65 ($130.) for the options. I'll wait on the other 300 shares to see what gold mining companies do in the next few weeks. RING was up 3.76% today, at the time of the trade...
Another safe thing to think about is to ladder in time or price or both. Or like you did wait for an up day and now ladder.. there are no wrong approaches. All of them basically will take some deltas off. So just think what your comfort delta is.. Hth!