High Yield ETF Covered Calls as of February 23rd 2007

Here are the results for today. SMH popped up so I’m excited I may get called in mid March during options expiry. That would mean an additional $750 in profit and bring my total return for 4 months up to 6.8 pct. Gold, China, Housing, and Semi Conductors all showing signs of life. Be careful out there!

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4 Responses to High Yield ETF Covered Calls as of February 23rd 2007

  1. Prince Andrei Bolkonski says:

    Great website. I like using ETFs for CCs for the very same reasons you describe. Do you ever use LEAPS for cover instead of the actual ETF? (I guess technically this is a diagonal calendar spread and not a CC.)

  2. The Yield Hoe says:

    Covered calls are a great area to track. Great site!


  3. RichSlick says:

    I’ve stayed clear of LEAPS so far because there is just something about making a very long term bet in this environment (war, geopolitical risks, etc) that keeps me from doing it.

  4. Prince Andrei Bolkonski says:

    I agree. However, there may be cases where your yield on the leaps positions is so high that you can buy protective puts and still have a greater yield than the traditional covered call position. I’ve been experimenting (paper only thus far) with the Qs. 4:3 ratio of long leaps to short calls (to gain from upside movements) and 2:1 ratio of long puts to long leaps. Net yield of around 5% remaining. I established that position Friday, and with the collars it made it through yesterday even. All guesswork at this point, which is why I’m wondering if anyone else does stuff like this.

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