Writing Covered Calls

If your going to do this just stick to SPY at least its diversified and the options market is high volume and more liquid.

 

and its not going to 0 like many stocks will.

 

Just imagine all the folks who tried to be slick and sold puts or wrote covered calls on C,BAC,etc..


Keep it simple. 1 lot of SPY and get a feel for it, write them with 30 or less days of time left.

 

Thanks for the HELP!!

I seen to have the tools and the sites I need for the present. Now we'll have to wait for the market to stabilize and show some improvement so the option values increase a bit.

And while I am waiting for that I can practice and explore.


TTP

 

The option values will decrease when /if the market stabilizes.

 

just got this spam email. selling covered calls is free money according to them:

"There are only two ways to make money in this kind of marketplace.

Trade options—open puts (mostly) and calls.
Or, writing covered calls to generate income and reduce risk.
The secret advantage of option writing is that you can enter trades where you have a very high probability of winning no matter what the market, a stock or a futures contract does.

In fact, you can sometimes enter a trade that has a 99% chance of winning. And with the volatility in this market, there's never been a better time to write covered calls:

Option premiums are extremely rich.
Many great stocks are at record low prices.
It’s the perfect storm to write covered calls to generate predictable profits. At times like these, it’s like they are giving money away on the exchanges."

 

That's worse than spam. That's ignorance.

LOL. Ask the people who wrote CC's at prices 20, 30, or 40 percent higher than today how it worked out for them.

LOL. It's a good pitch but it's like a slider that drops like a rock when it crosses the plate.
Noobs, beware!

 

I use Option Oracle, mentioned before.

I also use the service at Poweropt.com. They charge you a hefty amount for it ~($90 a month?) for real-time service. But it's a very convenient screener. IF you don't care about real-time, it's very inexpensive.

 

Finally found a site/tool that helps in finding those suggested (?) covered calls! Still need to do the research but for the new-bees here's a place to start:

Covered call:

http://www.optionsbuddy.com/default.aspx

Oops: if url's are not allowed search via Google for option buddy!

TTP

 

A CC query is simply a search for high volatility. CC = short put at static rates. The best return is a pin to the strike. Any atm vol scan for top-decile IVs is what you're looking for. Searching for CC's is irrelevant.