I felt I had to put money on the sidelines somewhere. I'm a retiree with quite a bit of money, but very little income. I do covered calls quite a bit. I bought 100 shares of EWY (South Korea mutual fund) at $92.47. I then did a covered call for the Jan 22 $110.00. I got $4.35 ($435.00) for it...Something outside the US, wait and hold for a high option price. I also bought CAR (Avis Budget Rent a Car) at $37.62...200 shares. I then did 2 covered calls for the Jan 22 $45.00. I got $7.50 ($750. X 2=$1,500.). I think by January 2022 people could be flying again. With the Democratic Party in power, they may nix (or modify) the gig system (Uber/Lyft). Two boring trades...
This is interesting although at first I thought you were talking Jan 22 expiration for 2021 and I'm like there's no bid. I've never seen a covered call strategy with selling mutli-year LEAPS. Do you always do them with such a long time frame? I'm usually doing them 30-45 DTE and then reestablishing.
Leaps work well with companies you KNOW will be there a year from now...Think McDonald's/Walmart. ADM is the best stock to option with a leap. Stock price has stayed the same for about 20 years...Good stable dividend (widow and orphan type stock). ADM can be great for inflationary periods too. Again, these are covered calls...I own the stock. I get the dividend (when and if they pay). The option money can be reinvest too. Just me... All leaps are over a year by definition...
Gotta say I kind of like it. If I had a much larger account and didn't mind tying up the capital. Avoids the shorter term gains to if you're holder over a year. I'm gonna ponder this.
EWY Up nearly 40% in 3 short months, this is going to take a much needed breather soon. Completely overbought.
I understand what you are saying. I am starting to look more at a long term horizon...Just my thought process. I own many ETFs from other Asian countries. Thought I needed to get into one of the small tigers there...Even through a recession. My mind goes to Warren Buffett adding Coke every year to Berkshire Hathaway...Why?? What's the logic?? He added to it in good years and bad...
Will add another trade today, rather than do a new thread. My wife and I have owned Century Communities (CCS) for about 6 months. These are very entry level homes. There seems to be great demand for entry level. These are not in the best locations (cheap land). But the houses are selling...Cheaper than renting. Don't remember my cost basis. It's hitting new highs...$50.12 as I write. Did 2 covered calls for Oct 21, $65.00. We got $3.70 ($370. X 2=$740.). Generate income (no dividend) while we wait...