Uneventful Expiration

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.

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2 Responses to “Uneventful Expiration”

  1. T Says:

    Although your approach appears to have a high degree of risk in a volatile market, I applaud your ability to shift investment themes. Many individuals can’t adjust. Good luck with your game plan.

    Your blog is well conceived and interesting.

  2. planetim Says:

    Thanks for the comment. This whole process is a learning experience/experiment for me. I have read about option trading for many years, and I am trying to work up a system that works for me. This blog and definitely the investments outlined are a work in progress. I hope to develop a system of consistent profitability.


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