Hey, Thanks Cam! Can you give me some more details? Which expiry do you ise? 1-2 weeks? 30 days? Also, how far away (Delta) from the strike are you selling the Puts? I don't have enough $$$ to afford assignment (unless one of my covered calls close ITM, but I usually close the trade before that happens!), so would be interested to know what trades you've got cook'n.
Discussion
If you have enough to buy the stock you can write naked puts instead and generate pretty ridiculous premiums.
I do like the covered calls on owning MSTR you’re using as you capture the upside on stock price.
Close to the money puts are producing 4-5% for 7-9 day contracts.
Or 30 day expiries 1 standard deviation below (so 70% chance roughly stock doesn’t get assigned you could go 2 SD to make it 97% chance it doesn’t and it still pays nicely) is making 8%…pretty insane.
It’s all just fiat mining on derivative volatility but it’s underlined by a levered play on the worlds best performing asset, so what the hell right?!
Thanks Cam, yes indeed - this would be a part of the Wheel Strategy I will try: sell a covered call, if the strike hits and I'm assigned to sell my contract, I will immediately sell a put below the current strike, collect the premium and wait to be assigned if/when my contract closes ITM....rinse, repeat. I need to fine-tune the optimal expiry & deltas for both calls & puts. Thanks again.
30 days utilizes maximum theta (time decay)