r/CoveredCalls

Currently i am doing day trading but it takes me to almost pay attention to market every minute, which impacts daily work.
Experience day traders (for whom trading is not primary job) - how you guys manage doing this trading, what strategies you use for which you don’t have to always keeping track of market.

Appreciate any advice/experience sharing around this.

A few things I learned the hard way:

Use ES puts, not SPY puts Weekly ES options are European style — the buyer can't exercise early. SPY is American style, early assignment is a real risk. ES also gets Section 1256 tax treatment (60/40 split). SPY options don't. Same trade, meaningfully different tax bill.

One main advantage to selling /es put options is that they open on Sunday exactly at 5pm CST or 6pm est. You're able to sell at a time when the normal market is closed. This provides about 15 hours worth of premium as opposed to selling on Monday. I

Only sell in uptrends I check EMAs before every trade. If ES is below them I don't sell that week. Full stop. Insurance companies don't write policies into hurricanes — same logic applies here.

No stop losses — take assignment if struck I let every trade run to expiration. If assigned I hold the long ES futures position until recovery. In 5 years max drawdown from assignment has been 3.73%, average recovery about 7 days.

The numbers since 2020:

• 99% of puts expired worthless
• ~$312 average weekly premium per contract

app link: https://putyield.com/

Feature	ES Puts (What We Trade)	SPX / XSP Puts	SPY Puts
Exercise Style	European — no early assignment risk	European — no early assignment risk	American — early assignment at any time
Tax Treatment	Section 1256 — 60% long / 40% short term	Section 1256 — 60% long / 40% short term	Equity option — 100% short-term rates
Dividend Risk	None — futures pay no dividends	None — cash settled index	Quarterly dividend triggers early exercise risk
Trading Hours	23 hrs/day — enter Sunday night at Globex open	Regular market hours only	Regular market hours only
Capital Efficiency	Futures margin — most efficient	Moderate	Similar to SPX but smaller
On Assignment	Long ES futures — hold and sell next Sunday's put	Cash settled — no position to hold	Assigned ETF shares — additional management

I'm leaving my job soon and will have roughly 4k shares of GOOG. I'm looking to use it to generate income safely, since I'll be mostly retired. But I also want to keep some of it since I do believe in the general direction of Google.

I'm fairly inexperienced with CCs, but here's my general plan:

• 1k shares selling weeklies at around 0.1 delta. Im estimating this will net somewhere around $800 per week

• 2k shares selling every ~two weeks at around 0.05 delta. I think this will be around $1000 every two weeks.

• Not trading the last 1k shares.

This should roughly put me somewhere around $65k per year. I mostly want the income for general living, we have part time income (~50k) to supplement the rest of our lifestyle. Our spending is generally only around 100k per year so missing some weeks is generally fine. We also have other investments that we could potentially pull from if really needed.

Is this a viable strategy? Would you handle it any differently?

The biggest catch is my basis on these are fairly low, so I'd like to avoid being assigned as much as possible since I'd be taxed pretty heavily. I've rolled some smaller CCs before but nothing of this magnitude. Does the rolling strategy work any differently when trading this many shares?

I’ve been running the wheel (cash-secured puts and covered calls) on Charles Schwab and I’m really frustrated with how the realized gain/loss section works.
The main issues I’m seeing:
• When my CSPs or CCs expire worthless, the premium I collected doesn’t seem to show up anywhere in the realized P/L. It just ignores the credit I received.
• When I roll an option, it seems to only show the loss on the original position without properly accounting for the net premium/credit from the roll.
This makes it almost impossible to see my true profitability from options trading at a glance. I haven’t been consistent tracking on spreadsheet.

Curious if anyone has any solution besides tracking manually.

Edit: it seems though that some premiums show but I don’t understand why and the discrepancy is close to 70 percent.

Sorry I’m new to selling covered calls and I was wondering if someone can help explain the option box to me. I have a cost of $9.37 a share and a premium of $19.00 minus .65 commission for Fidelity. Thank you to everyone who regularly posts on here. I’ve learned a lot.

I recently came across selling csp and cc and I’ve been doing it since end of last year…wish I discovered it sooner. For those who are more experienced, how much do you average a year from selling covered calls? And how much capital are you using?

I’m new to CC and have around $150k in equities. I want to start CCs, and don’t know where and how much to risk. Any advice would be helpful.
How much should I start with, how much do I withdraw from equities and move into CC, and how should I start?

Well. 8200 shares of IBIT. CC’ing every month. .15 delta. I don’t think I can fail. Long Bitcoin. Theta Gang.

CCs with HIGHEST IV

$ASTS - 120C

$IREN - 60C

$NBIS - 240C

Source

https://preview.redd.it/1jennfwaaa2h1.png?width=920&format=png&auto=webp&s=ad9ab4385c8dbf9d7705ee9caf0251fec6800282

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?

Curious y’all’s perspective on this, but if you sold CC that are now deep in the money, would it be a a smart strategy to just roll it out one week at a time at the same strike price and collect the premium or would you just let them expire and move on?

I’m not in this situation yet, but I feel like if I got burned on one of my Covered Calls this would be a good way to still make essentially “risk free” money?

Let me know your thoughts

Title basically, if you are running cc in a tax advantaged account, how would your strategy change about get assigned rolling etc etc.

Even if you receive an assignment a month later, the actual praised price is around $10.34, so it looks attractive, but in the opinion of seniors, I wonder if the recent volatility of this underlying asset or the entry point is appropriate!"

I have about 4K in cash and want to start selling covered calls weekly. I have looked at Ford and SoFi. Are there any other ones that have really good premiums? Thank you in advance!

If you have been following my previous posts in this sub-reddit, few months ago, I built a tool for myself to keep track of covered calls (and later cash secured puts) each week to identify the best ROI trades. For me, ROI is defined by lowest downside for the stock and disproportionately higher premium (for every dollar I invest). I used to do this on spreadsheets - but now this tool helps me stay on top.

I just made the tool sleeker:
- added dark mode
- added "Trends" feature, where you can see Premium Ratio for a stock change over time

- hidden feature of color-coding by WSB mentions :)

Let me know if you have other ideas to make it better.

https://preview.redd.it/6cyorccm1q1h1.png?width=2538&format=png&auto=webp&s=b7d86ff9485a0267d067a3b044b76bfe9f2b4115

https://preview.redd.it/z8szkccm1q1h1.png?width=2540&format=png&auto=webp&s=558ce1ddeb930810e474c806adb3ec53ce61391d