ETF Covered Calls 11-14-2008

There are three years of history on this blog to look back to get a small historical perspective.   I’m going to link to the equivalent weeks for November 2006 and November 2007 so you can understand what I’m talking about when I say there is way too much volatility.   If you click on the links, you’ll see that in November 2006 there were about a dozen ETFs which had high yielding call options > 3% over the next few MONTHS (not week)!   If you look at November 2007, there were two to three dozen ETFs with high yielding call options > 3% over the next MONTH!

Now that you have that context, take a look at what the ETF-Cashinator kicked out for the next few DAYS (Not weeks, Not months):

2008-1114.png 2008-1114b.png 2008-1114c.png 2008-1114d.png 2008-1114e.png 2008-1114f.png 2008-1114puts.png 2008-1114putsb.png

There are about twelve dozen ETFs with high yielding covered call options for the next 5 DAYS!    In a “normal” stock market we would need to be looking at December or January to get some decent premiums on call options but because of the crazy volatility, we can look at the next five days and get great deals.    Next week will be another crazy week and unfortunately, I see a pattern of complacency.  People buy when the Dow hits 8000 or slightly below then sell when it rallies toward 8900 and above.   It’s this kind of pattern and complacency that will lead to a huge fall off when the market doesn’t rally as expected and we’ll be down to the next leg down (Dow 7000 or 6000).      Be careful how you invest and make sure your strategy meets your goals.    Good luck.

ETF Covered Calls website is for educational and entertainment purposes only. Any investment activity is not without risk including loss of principal. Neither this website nor its authors assume any responsibility arising from the use or misuse of any information presented in this blog. You are urged to contact a financial adviser before making any investment decisions. Past performance is no indication of future performance.


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