Over the past few months, the volatility in the markets has created an interesting opportunity and I’ve been considering adjusting my ETF Covered Call strategy slightly. As a general rule, I usually hold the options through options expiry and wait to be assigned or let the options expire worthless but because the market will violently turn up then down or vice versa, it has become prudent to buy back the options when the option profit reaches above 80% and either resell them again when the market shifts or sell next month’s options at the same or better strike price.
I’ll try to follow this rule moving forward with my existing holdings and will continue to sit in cash until this rudderless Titanic steers a new course.
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