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RE: TIB: Today I Bought (and Sold) - An Investors Journal #486 - Oil, US Retail, US Technology, Europe Index, US Telecom, US Bank, US Retail, Uranium, Bitcoin, Ethereum
I like your call on Google, as I agree as well. I notice your spreads are +5 points, what's your rationale, more profit potential???
I assume you mean spreads on my covered calls. I use a variety of spreads. 5% for stocks that are currently profitable and 7.5% for tech stocks (as they are more volatile). 10% for stocks that are not profitable - if a stock is going to move 10% in a month, I will exit even if I am exiting at a loss. Leveraged stocks I use 20% - example I use SQQQ as a hedging trade, or something like DRV or TMV.
I have just learned this over time - gives me a good success rate on getting buyers at reasonable premiums and not getting exercised or assigned. Basic principle = the higher the volatility the higher the spread.
My investing coach used to do covered calls differently. He would buy stock for the calls and write one strike out-the-money always. I just found this resulted in too many exercises or assignments though the returns were generally better.
last point - I mostly only write the current month (sometimes I will go out 6 weeks to next month).