Hi Bob,
Thanks for the detailed analysis. You put a lot more work into than I do. I tend to be more of a fundamentalist but have a feel for the technical(s) but I let my gut and overall economy drive my selling. Since April 2011, I have shorted CVX puts 22 times. This is my highest strike but I like CVX plus Andarko, My strikes have been as low as $95. I have accumulated over $12K premiums in CVX and have never been exercised although, I had to roll to prevent assignment on more than one occasion. I have a decent sized position and sometimes sell calls but don't keep track of call premiums. CVX is JUN btw - it moved against me but I don't really care.
Both long term and shorter term puts have their positives and negatives. Longer term gives you more of a cushion but short term gives you more flexibility. I monitor my positions that are getting close to par (with div) closely and usually roll when they are in money and I deem potential of assignment as "high". Deep ITM and that could be anytime.
I have some LT XOM as well but overall like CVX better.
CVX would be the highest yielding stock that I have an open position (PUT). I usually use higher BETA lower yielding stocks.
Current open positions: BA, CCI, CVX, HD, HON, LMT, MCD, PH. If I find something that appeals, I may sell some BDC's or CEF's. Not a lot jumps out at me except Health Care.
I don't tend to fret when my positions drop even by a lot. I am diversified and tend to look at large market declines as gifts.
I have found that the the monthly plan works until it doesn't. Sometimes, the premiums are event or earnings driven. When volatility goes down so do most of the premiums. Sometimes it is sector or stock dependent. You don't get paid commensurately for the risk. Sometimes the stocks run up and the lower strike premiums are nil. |
