ETF Covered Calls 03-21-2008

It’s options expiry and it looks like all my calls in my power account expired worthless which means they’ll be opportunities (hopefully) for more profits in the future.   I banked the full $2900 on the calls I sold about a month ago on EEB and DXD.  I’m not concerned about DXD being down because all it takes is a major event to send the Dow spiraling down again and I’m sure it’s going to happen before summer hits.

In my mini account I did get called out at $72 as DDM closed at $72.57 and I had originally bought in at $72.30 so I’m taking a $0.30 loss from the original $3.60 I made so I’m walking away with $3.30 x 200 in profits!

It’s time to look at April and here’s what the ETF-Cashinator has selected.

2008_0321.png  2008_0321puts.png

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ETF Covered Calls.
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2 Responses to ETF Covered Calls 03-21-2008

  1. madrichguy says:

    From the ETFs listed, what algorithm will you use to decide which to short calls? Do you just automatically pick those with the largest “yield”?

  2. RichSlick says:

    The program scans all ETFs that meet a certain criteria: avg. vol > 100k traded daily, options, etc.

    From this list, the program scans and sorts the highest yielding options 30, 60, 90, 120, etc days out.

    After examining the list I begin my research into the highest yielding ETF to determine which one I would like to invest in. I factor in currency movements, economic data, financial news, world wide interest rates, money flows, and a few other factors before I make a trade.

    Picking those with the largest yield will likely cause an investor problems.

    I also look at the Puts to determine where the heaving “betting” is going to help determine which ETFs might fall or are heavily “insured” by investors.

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