Year 1 Results - Thoughts and Advice?
I am approximately 1 year into selling covered calls against $1m of held stocks in my taxable portfolio. They are:
1200+ shares of Amazon - 30%
700+ shares of Visa - 20%
900+ shares of Reddit - 15%
1300+ shares of Netflix - 15%
1500+ shares Robinhood - 10%
100+ shares of Meta - 10%
My goals over the past year have been to educate myself by wading slowly into selling covered calls, generate some additional income which is re-funneled back into my holdings, and avoid shares being called away.
To achieve the last point I have sticking with Deltas between .075 - .15, which I understand is conservative and caps returns.
I have been writing 45DTE calls trying to avoid earnings dates and also pausing on writing when there is notable world turbulence.
That said, here are the stats:
- After one year I made ~$23,000
- Wrote 72 total options, most of them on Amazon, Reddit and Hood
- Got spooked 3 times after big moves and closed the position early for losses, which really brought down my returns. These are huge positions for me and capital gains taxes would have been really bad so I took the lesser of two evils. I am not blind to the fact that I'm trying to pick up pennies on dollars with my strategy but what can I say, $23k is $23k and all it takes is finger pecking on a keyboard every now and then.
- Learned about rolling a bit too late, and have now rolled 5 options. 4 of them avoided being called away, 1 is still active.
- Generally speaking I try and wait until I can capture 60-70% or so of the premium, but have closed up 50% if only 7-10 days have passed since writing. 50% returns on 25% of the time seems cool to me.
I'd love to hear thoughts and advice from those with more experience. Primarily, am I missing something that could unlock better returns/success rate with the stats I shared?