{ "media_type": "text", "post_content": "Anyone here sell weekly covered calls for passive income? Taking a few hundred k and running back of the napkin math, the numbers are astounding \n\nAssuming you do it on a stock that only goes up", "post_id": "60fc3b9a6bd41600245aebf4", "reply_count": 43, "vote_count": 2, "bowl_id": "5acc42208c6b52001375e11e", "bowl_name": "Option Traders & Investing" }

Anyone here sell weekly covered calls for passive income? Taking a few hundred k and running back of the napkin math, the numbers are astounding Assuming you do it on a stock that only goes up

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I sell CC’s a lot, my goal it to pay my rent that way. Not there yet. You need rules and disciple though, and don’t go chasing premium. And sometimes you can’t. I’m bagholding several tech stocks that have been hammered, and will not sell cc’s below my basis. I’m just buying more because I believe in them long term.

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So philosophically I think there are two ways of going about it. For stocks I want to keep more, I’ll do x%above the current price (10-20%, depends on the time and trajectory). On stocks I’m more ambivalent about wheeling, I’ll look for a respectable rate of return of capital(1-2%), as long as it’s above my true cost basis.

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I average about $1.5K to $3K on weekly CCs / PMCCs. I don’t run CCs on my full portfolio of long term holds every week. I usually go pretty conservative on weekly at .08 delta. It’s a bit of work to do weeklies, but it is lucrative. Regular CCs are pretty easy, but PMCCs require a bit of math to make sure you know your gameplan if you get into delta inversion territory.

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Several semis: INTC, AMAT, MU. I use to do NVDA and they got called away Big Tech: GOOG (PMCC), FB China stocks: BABA, BIDU Recovery plays: BA, UAL, LUV Yields decent return on premiums but all of them have been beat up last few weeks.

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On a stock that only goes up is the worst scenario to sell covered calls. You want stocks that have a lot of chop and are range bound for a while.

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Ya STA that’s exactly what I’m saying. I’ll take a look into that!

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I wouldn’t do a CC strategy on a stock that’s in a bearish trend - that knocks out just about everything mentioned here. The premiums are great in stocks where lots of people are buying puts. And there’s a reason why these names have lots of put action.

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Or even worse, let's say you loaded up on TSLA around 900, and now its mid 600s. If you don't sell a CC below your cost basis, you are bringing in $5-10 a week. And that is having 90k of capital (now 65k) tied up while waiting for the recovery. So SM's point is very valid

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I live dangerously. I write calls NAKED and then my broker bans my account

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*Robinhood has entered the chat*

Thoughts on a covered call ETF like QYLD?

It’s a CC ETF on QQQ. That’s why it draws down to pay out dividends from the covered calls. Doing actual CCs on this fund is pointless since IV is insanely low.

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spce

Wheel Strategy

What are your top tickers to do this with

I was thinking MSTR because I’m a huge bitcoin believer and the premiums are very high

What are some good tickers you use?

SQ and MSTR

Sell naked puts . It's the same strategy only much cheaper

I’m not sure I follow you. I said selling puts OTM is less risky than selling calls OTM because you have room for the underlying to move down before assignment risk.

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