Small and large dividend stock and ETF investors can use covered calls and puts trades to generate monthly income from options premiums and options trading.
I doubled down to get my average cost down to about $43. My net debit is $39.39. I'm trying to get $0.12 to $0.15 on covered calls every two weeks. That and dividends should get my net debit down another $5 to $10 a share in the next year or so, depending on what the stock does and what happens to its volatility. On a net debit basis, I figure it will take me less than two years to break even. Meanwhile, the 5.38% dividend plus 9% to 15% AROR on call options is a good income trade in an IRA.
Thanks Donald! I am realizing that an option trader learns more in a down market! I have done well with AMZN the last month with weekly covered call options. PAYC is reminiscent of PARA for me....cost basis of $33.00 trading around $11.00...I keep selling calls to lower basis but the premiums have not been that great. Do you think it is wise to set a loss limit on stocks that you are righting options on?
By the way I also own PFE but at $33.00 cost basis. That’s why it is so important to trade stocks that have a decent dividend.
I doubled down to get my average cost down to about $43. My net debit is $39.39. I'm trying to get $0.12 to $0.15 on covered calls every two weeks. That and dividends should get my net debit down another $5 to $10 a share in the next year or so, depending on what the stock does and what happens to its volatility. On a net debit basis, I figure it will take me less than two years to break even. Meanwhile, the 5.38% dividend plus 9% to 15% AROR on call options is a good income trade in an IRA.
Thanks for your support.
Thanks Donald! I am realizing that an option trader learns more in a down market! I have done well with AMZN the last month with weekly covered call options. PAYC is reminiscent of PARA for me....cost basis of $33.00 trading around $11.00...I keep selling calls to lower basis but the premiums have not been that great. Do you think it is wise to set a loss limit on stocks that you are righting options on?