jack, i did trade cc's on tlt a while back i think i even posted here or another board. when i traded it the premiums were much lower than today. the premiums for a 30 call were in the range of the dividend therefore you had to be careful and that is why i waited until after ex-div and since there was almost no decay the first week it didn't make a difference. i just checked and surprised the one month dividend is so large. i will need to revisit cc's on tlt. however, i disagree that tlt is a VERY stable it is usually to have 20% swings during the years if you look at the charts...not that would make a difference in returns if managed correctly...
--- In ConservativeOptionS
>
> Dr. Joe,
> Wonderful to see you active on the group again!. There is just a small danger of early exercise, only a little of the TV (Time Value) has eroded from the short calls by the first of the month. Currently TLT pays a dividend of approximately .30/ share / month. The call writing income on this very stable ETF is where you make the most money. If I were to be exercised early I would simply re-enter the trade and be happy I captured my call writing income sooner.
> Regards and great trading,
> Jack
>
>
>
>
> ____________
> From: joe & leigh <gass20@...>
> To: ConservativeOptionS
> Sent: Sun, November 29, 2009 5:22:30 PM
> Subject: [ConservativeOption
>
>
> jack...you should trade (assume you are doing cc's) after ex dividend date usually around first of the month not right after normal expiration.. ...people exercise to capture monthly dividend.... that way you capture the dividend...drjoe
>
> --- In ConservativeOptionS
> >
> > Bill,
> >
> > I began to trade TLT in early May, 2009 as
> > the fixed income portion of my IRA account. To enhance the return I sell
> > calls against my position each month. (We sell the call with the
> > greatest TV, Time Value) This idea was borrowed from the moderator of
> > another yahoo group I am a member of. I liked TLT due to the volume and
> > and liquidity of the options. The on-going trade has worked very well.
> > So far I have never been called early for a dividend, receiving it each
> > month. When called away I replace the position. Often late on expiration
> > Friday, if in the last few minutes of trade it is apparent we will be
> > called the new positions are added. I figure I will capture an extra few
> > days of TV erosion over the weekend and a good use of cash since I
> > would want to re-enter the position on Monday.
> >
> > My concern will be the FED-HEADs starting
> > to play with interest rates. We basically have no place to go but up
> > from where we are currently and that will of course affect TLT. I am
> > looking at TBT as a short term trade ahead of FED meetings. TBF, a
> > non-leveraged ETF, would be preferable to me but the volume is low and
> > open interest in the options is almost non-existent.
> >
> > I have looked over the site you suggested
> > (www.oldschooloptio
> > TLT, perhaps because it is an open trade? Without exposing information
> > you have agreed not to share, could you write a little more about how
> > you are using TLT and what the plan will be to cope with interest rate
> > increases?
> >
> > Regards and
> > great trading,
> >
> > Jack
> >
> >
> >
>
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