▲ 12 r/CoveredCalls
I've been running a PMCC with relative success and I would like to share my rules for anyone who is interested. I currently have 13 positions split into 3 categories:
Ballast: SPY, SMH, QQQ, WMT
Engine: GOOG, CAT, ANET, MU, NVDA
Flyers: HOOD, MSTR, RDDT, ASTS
All my long LEAPS are purchased at .80 delta. Current expiry is Jan 2028. I extend the expiry 9 months before expiry. I'll buy Jan 2030 LEAPS in Jan 2027.
My short call deltas depend on the bucket. I sell 30 - 45 day expiry
Ballast: .24 delta
Engine: .20 delta
Flyers: .18 delta
I use the fidelity options chain to pick my deltas.
Cull rules
I rotate out of an engine or flyer position if my long leap is down 30% no exceptions. I do not cull engine positions.
Short call rules
I close short call position once it is 70% OTM. Eg I sell short call for $1000 premium. I close position once short call is at $300.
I buy back short call position once it is 100% ITM. Eg, I sell short call for $1,000 premium. I buy back once short call is at $2000.
I do not sell short calls into earnings. I leave my positions naked. I sometimes buy short term puts to capture any drawdowns during earnings.
Hedging
I ensure 3% of my account total is hedged at all times. I currently have $9K split across SPY puts and VIX calls.
Dry powder
I make sure I have 7% of account total in cash which i store in sgov. The cash is used for buy backs and for LEAP additions.
Premiums
Premiums are allocated to sgov, hedges, i also use a fraction to buy leaps on high beta stocks such as LUNR, PL, HIMS, SOFI, RIVN. I do not not sell short calls on these. Just pure option plays.
u/Naijaceej — 4 months ago
▲ 11 r/wallstreetbets
u/Naijaceej — 4 months ago