Yesterday, Friday, was pretty good for me. My stock positions are starting to move in a positive direction and my two open calls expired worthless. On Monday and Tuesday I will be looking at the April and May options for new opportunities for income.
The recent pullback in the market has me thinking about the quality of the stocks I am writing covered calls on and what I can do for downside protection. My strategy is to write covered calls on stocks with high implied volatility, thus higher option premiums. I have learned I need to be very diligent about learning all I can about the near term prospects of these companies. One bad decision can eat up the profits of 3 good ones.
As far as downside protection, I think my account is still too small to be able to take any cost effective action to protect the values. Anything I could do would be just guessing. I am interested at this point in how much option premium I can earn until the stock prices recover to early February prices.