I will eventually get the terminology right, Frank! I went ahead and placed a day order to close the calls out that I had sold. Q at 5.10 and NTAP at 1.10. See if they will fill in the morning. This would turn a very decent profit for a weeks try if it works. With the Cisco news and the euro reaction, it probably wont.
I am kicking some thoughts around on the best way for me to generate some income the next few months in this market. I will post them here in hopes of some responses from the people here who have been doing this for a while.
1) I want to generate a premium and volume that will make it worth while to sell and close out CC's in a very short time frame.
2) going out about 6 to 8 weeks at the money seems to generate a good premium on CC's
3) Consolidating my portfolio to make this easier seems prudent.
4) If I used QQQ for a large chunk of this it would make my downside less risky than, say, going three Gorillas.
5) I would try to sell the calls on an uptick, and put in a "Good until cancelled" order to close the call out at, say, a 10% profit. For instance, QQQ closed at 37.32 today. Lets assume that was an uptick close, which, of course, it isn't. Oct 38,s are selling for 2.40. I could do a "buy-write" for contracts at 2.40 and an buy to close order at 2.10. Normal fluctuation should fill the order in the next week, If it does, I do the same again.
This is my preliminary thinking. |
