"At the risk of being argumentive, I would say that while the acceptable return obviously is indivual specific, the goal should be higher in up markets, moderate in sideways markets and lowest in down markets. If someone were a master of puts, he/she might disagree about the down market. "
I am able to do 2%+ per mo with the CCs and salt the returns lately to ~3% using Bull Put Spreads and Cash Secured Puts. You will not find me bemoaning a 3% monthly return. I pay very special attention to limiting the Cash Secured Put risk and highly favor the use of Bull Put Spreads. When the market turns I will do Bear Call Spreads in place of Bull Put Spreads.
Bob
--- In ConservativeOptionS
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> I have been over to the "just covered calls" web site and seen some bemoaning that they make ~2%/mo and can't keep up with the S&P 3.3%/mo. They started with a goal of 12% per annum, got 24% and now are unhappy that they didn't match a 40% standard--ahh human nature!!
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> One thing for sure, if you limit your gains to ~2% by writing ATM or ITM calls you won't make more. If 2% is the goal, stocks like BPL and KGS, yield near 8% and their stock price as been growing at 2% per month with a business plan meshing with the shale natural gas finds that need pipelines -- which means continued growth in stock price and dividend.
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> I, for one believe in looking at the chart before deciding what call, if any to write. If the stock, e.g. MELI, has a rocket under it, why would you ever write a call that is ITM? If your indicators tell you the stock is definitely in an uptrend, then ATM or OTM definitely makes more sense than ITM. And if OTM calls pays very little, why not ride the stock or the leap. I came to this startling revelation doing calender spreads using leaps and continually getting burned. The long call made money but buying back the short call took most of that gain away (I didn't get enuf for it, and had to pay a lot more to get it back). Another of my conclusions: calender spreads are happier with boring stocks or ETFs (read low IV), not ones that make more than a few %/month.
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> At the risk of being argumentive, I would say that while the acceptable return obviously is indivual specific, the goal should be higher in up markets, moderate in sideways markets and lowest in down markets. If someone were a master of puts, he/she might disagree about the down market.
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