OptionalSpy
股市纵横学习日记
正文
After trying all different ETFs, SPY seems to be the most reliable underlying to play covered call strategy. others decays too fast if the market is slightly on the opposite side. However, SPY option is not huge due to its stablility. So to get reasonable income, the striking price has to be close to on the money or even in the money.
Suppose to hold SPY for 30 years. It's impossible that SPY 30 years later will be lower than today, given all circumstances. This means the underlying will NOT lose money in the long run, which is the huge assumption for the strategy. On this assumption, the call or put premium sold every month, even if it's small, will be free money every month. This free money is assumed to be 2-3%. This is a long term LONG strategy.
Get started when the big trend is NOT DOWN Sharply. Alternating between cash secured naked put when not owning the underlying and covered call when owning the underlying currently. To collect the maximum premium, sell on-the-money or slightly (1-2) in-the-money options. Don't sell out-of-money options. When the uptrend is strong, consider in-the-money naked put or on-the-money covered call. When the uptrend is weak, consider on-the-money naked put or in-the-money covered call. Always sell on Monday after O/E day to collect maximum time value.
From now on, collect the following information every month on Monday after O/E. Also simulate trade in TOS paper trade to test the strategy. And create note every month to track the end result of the stratrategy.
Date: SPY OnCall $1InCall $2InCall OnPut $1InPut $2InPut
0906 88.88 3.10(89) 3.55(88) 4.15(87) 3.55(89) 4.10(90) 4.65(91)
Month 5 collects full premium $3.10
Month 6 premium becomes smaller. sold $2.48 and expires worthless.
Month 7 will adjust the strategy slightly by setting trailling stop to sell over the whole Monday to sell naked put. If the stop doesn't trigger, then sell by the end of the day. This way can avoid sudden price drop on Monday. This will enhance the option price a bit. Month 8 is the start of bull market.
Month 7 premium becomes even smaller ($2.37@93) although the time is 5 weeks.
Month 8 missed the first week. sold the second monday $2.11@103 with TS-20C throughout the day.
Month 9 sold on Monday $2.93@107 with TS-25C through the day. The striking price is set on basis of Friday's close price and Monday gaped down to start with 106. The striking price needs to be decided on Monday Morning to avoid this risk.
Month 10 sold on Monday $2.64@109. A mistake is that TrailStop has to be set right on the open. This morning the stock shot up and -25C trail bases on a low price. Month 10 ends at 109.43 and after sharp down the market ends up flat. Full premium is collected.
Month 11 solde on Monday $2.0@110. This is the lowest premium collected so far. And the market drops almost right away.
Suppose to hold SPY for 30 years. It's impossible that SPY 30 years later will be lower than today, given all circumstances. This means the underlying will NOT lose money in the long run, which is the huge assumption for the strategy. On this assumption, the call or put premium sold every month, even if it's small, will be free money every month. This free money is assumed to be 2-3%. This is a long term LONG strategy.
Get started when the big trend is NOT DOWN Sharply. Alternating between cash secured naked put when not owning the underlying and covered call when owning the underlying currently. To collect the maximum premium, sell on-the-money or slightly (1-2) in-the-money options. Don't sell out-of-money options. When the uptrend is strong, consider in-the-money naked put or on-the-money covered call. When the uptrend is weak, consider on-the-money naked put or in-the-money covered call. Always sell on Monday after O/E day to collect maximum time value.
From now on, collect the following information every month on Monday after O/E. Also simulate trade in TOS paper trade to test the strategy. And create note every month to track the end result of the stratrategy.
Date: SPY OnCall $1InCall $2InCall OnPut $1InPut $2InPut
0906 88.88 3.10(89) 3.55(88) 4.15(87) 3.55(89) 4.10(90) 4.65(91)
Month 5 collects full premium $3.10
Month 6 premium becomes smaller. sold $2.48 and expires worthless.
Month 7 will adjust the strategy slightly by setting trailling stop to sell over the whole Monday to sell naked put. If the stop doesn't trigger, then sell by the end of the day. This way can avoid sudden price drop on Monday. This will enhance the option price a bit. Month 8 is the start of bull market.
Month 7 premium becomes even smaller ($2.37@93) although the time is 5 weeks.
Month 8 missed the first week. sold the second monday $2.11@103 with TS-20C throughout the day.
Month 9 sold on Monday $2.93@107 with TS-25C through the day. The striking price is set on basis of Friday's close price and Monday gaped down to start with 106. The striking price needs to be decided on Monday Morning to avoid this risk.
Month 10 sold on Monday $2.64@109. A mistake is that TrailStop has to be set right on the open. This morning the stock shot up and -25C trail bases on a low price. Month 10 ends at 109.43 and after sharp down the market ends up flat. Full premium is collected.
Month 11 solde on Monday $2.0@110. This is the lowest premium collected so far. And the market drops almost right away.
If sp go back to 800 range, spy is a good buy.