William
>>Why do you pick the maximum time allowable? I usually do just the opposite, write the front month. The further out in time you go, the less is known about what the market will be doing, the smallest dollars per day decay, and the most time your assets are locked up.<<
Since I am forgoing most/all of the upside while retaining all the downside risk, I need to be compensated - so I (usually) take in the maximum time premium. Also, I don't want to pursue a transaction rich strategy, which selling short dated calls tends to be: selling the calls, buying them back, rolling them up/down, having the stock called, trying to buy the stock back on a dip - oy!
I want to focus on choosing stocks which (imho) have minimal downside risk since I am selling naked puts. I don't care if they go up, as long as they don't go down and stay down.
Finally, if I was any good at playing the little waves and ripples of a stock, I would just as soon simply buy and sell (or short and cover) the stock and not complicate it with short dated calls (obviously, this works well in IRAs but maybe not so well in taxable accounts).
All of the above offered most humbly. -gg-
Mike |
