Dan,
You wound up (on margin) with 40 % return on all of those trades, including commissions and margin interest. Super return for CC writing.
One point though. If you had simply traded the stock, with the protective put in place, and expiring worthless, you would be up 80%. You lost money on every one of your CC trades, and made it on the stock trade.
I personally don't care for rolling up, or rolling out. I will roll down if I get caught in a stock that declines, though, just to keep cash coming in. Every time you roll up or out, it increases your investment in the position, thus tying up capital you can use more effectively somewhere else. If you set specific goals for your CC program, meet them with your CC, and don't pine over "lost profits" when the stock scoots above the strike, I think the return is much greater over the long haul. You also expose yourself to greater risk each time you roll up, or roll out. In the former, because you have moved the trip bar up in the trading range, and the later, because time is the call writers enemy.
I currently have 8 positions in play. All are virtually certain to be exercised. All were put in play with OTM option writes on very strong (fundamentaly), volatile small caps, with great TA positions. Yes, I am leaving a bunch of money on the table from appreciation of the stock prices, but my ROI per month is a very safe 25%. I kinda like that, after daytrading myself a few months ago to a fazzle for nothing.
Different strokes, for different folks, eh? Wouldn't be market if we all did it the same way! |
