- experiment and more thoughts on efficiency of capital.
So a few weeks into the options income blueprint. One of the things they recommend is higher $ return on covered calls vs. selling puts. In looking at the numbers may be right in terms of absolute dollars. However on a percentage basis selling puts is higher.
Example, buy write on TSO right now with stock at 79.3, you could do 10 lot on next weeks 77 strike and the call you would make $980 and on the put only $810. So in absolute terms make $170 more on the buy write than the put write. Looking at most stockso this seems to be true, even more with names that are skewing to the upside and the calls are more expensive than the equal distant puts.
Now on a percentage basis, the put writing is better but on an absolute basis make more with the buy writes. Maybe better to write puts on margin and buy writes in retirement accounts.
I used to trade deep ITM covered calls 3 months out. Gave good protection 10-20% but found theta decay to be slower than paint drying. However, was successful.
Thoughts? Any of you doing ITM covered call on a weekly basis?
Options Bistro 