ETF Covered Calls 12-26-2008

Hope everyone had a merry Christmas.  It turns out the Grinch is still lurking inside the ETF Covered Call investing strategy as the ETF-Cashinator kicked out 9 pages of volatility.   What is strange however is that there is very little call volume so no one is trading options which might explain the unusually high premiums.   Please note that some options are ADJUSTED OPTIONS so be careful if you trade any of them, better yet, stay away from them if you can.

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6 Responses to ETF Covered Calls 12-26-2008

  1. The Travelin' Man says:

    I’ll share one of mine with you. I think I felt like I should have made that last deal (QID that I posted a little while back), so I hope I didn’t get an itchy trigger finger.

    I bought 200 GDX ~$29.50 at the beginning of last week. I waited for the price to bump up some through the week, and then sold the Jan 30 calls (when GDX was ~$31.80) for ~$3.15, raking in about $630 after commission. If called at $30, I will make almost 15% for under 30 days hold. I do think that there will be some pull back, which is why I sold in-the-money calls. If it pulls back a bunch, I will look to buy back the calls and re-sell on the next bump up.

    Hopefully, the entire world economy won’t collapse in the next three weeks!

  2. RichSlick says:

    The temptation is there but I’ve resigned myself to waiting until after the election before trading again…….

  3. The Travelin' Man says:

    The election?

    Why? Is there someone particular you like for 2012? ;-)

  4. RichSlick says:

    Lol! I meant after the inauguration of President elect but it may take until 2012 for this market to recover…..

  5. The Travelin' Man says:

    Figured that’s what you meant. It just seemed like a good time to take a quick poke!

    Just so that you don’t think I did my math while drunk, my 15% yield calculation includes a dividend of 74.5 c/share that I will collect on 12/31.

    Happy New Year….enjoy your vacation. I am off to Philly and the northeast myself for a couple of days (stupid boy).

    TTM

  6. The Travelin' Man says:

    Looks like I will get called away on GDX. I must have gotten some bad info, because they paid no dividend. Still, the take was ~12% after commissions on 22 day hold (I think). Take a look at the GDX chart for the last couple of days. I really thought about buying back my options yesterday – would have made 90% instead of your targeted 80%, but it seemed silly to pay the commission on an option that looked, for sure, to finish out of the money.

    Oh well…I will probably hold the cash for a little while anyway.

    In a somewhat related note, I did pick up 300 shares of UYG yesterday at $3.818. I was able to DCA my current position down to where I only need the fund to double for me to break even! :-) I am hoping to sell $4 or $5 calls on the next spike up – and it will come. With this little downside risk, I am OK with holding it for a little while. Could have done the buy-write for ~16% for FEB, but I am going to see what plays out a little.

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