PK,
Covered writes by definition, are great in a stagnant market. You're pretty exposed for your 17%, and for close to 9 weeks. I don't really think the risk is worth the reward here UNLESS you think you'll be called.
I have no appreciation, and I'll admit it, for what's left on the downside on any of these oil drillers any more. I am plain ole numb. GLM selling at 2x book value. Ridiculous. However, if you have a feeling we're at the bottom, and we'll go flat for a while...then you could be onto something. Again, from people who'se opinions I respect here, it might be the wrong play for 9 weeks of duration.
You might pull the trigger on this, but a nasty market could compound an already nasty sector. Buy/Write are not the thing now. Naked call writes might be, or I think long puts are probably the way to go, in other areas.
Regards, |
