A stupid question: Why, for someone with your years of experience, do you want to write covered calls?
The benefit of selling 2 options at 20 delta in comparison to e.g. selling one option at 40 delta would be less gamma? If so, noted; but how would the theta compare? Correct me if I'm wrong, but I think this would lead to taxable gains but non-tax-deductible losses (until the stock is sold) on the options, with accordingly bad after-tax returns of the strategy in taxable accounts.
Would you mind shedding some light on your rationale? How does 45 days compare to 30 days or 90 days in terms of gamma risk (need to rebalance or hedge more or less frequently), assignment risk, theta exposure per risk, effective trading spreads and all-in trading cost per exposure? Any other considerations? Also, do you roll (e.g. at the 21 days mark)? Lastly, why do you do this with futures options instead of SPX options? My understanding is that the spreads and all-in trading cost are somewhat higher with FOPs than with SPX options. Thanks in advance.
And what´s the track record selling the covered vertical calls/put spreads after 25 years? You should be retired by now, don´t you think?
lol...I do this as a broker with different clients who have different preferences. I do not do this as money manager.
I do this with futures options only. Variety of markets like crude oil, SP futures, gold, bonds etc. Depending on the set up, the market, the signals and the clients I work with. Each trade can be different and i shared the above as a general preference/observation and not as a pure trading model. Bottom line you still need to be right where the market isa going or not going within the time frame.
Are your clients happy with their results? Just curious because I wasn't happy with my covered call trades.
Varies to be honest....I think that selling premium using vertical call spreads and vertical put spreads is a good strategy to explore but there are many factors that go into the mix: Trader's risk appetite, the specific underlying market and volatility, alternative strategies.