That’s equivalent to selling OTM puts on stocks/ETF you have no real desire to own. You might end up owning them especially if you are generating additional income than risk free rate.I write deep in-the-money covered call options in lieu of a money market fund on stocks/ETFs that I have no real desire to hold on to but have sufficient volatility to generate decent income. I have been receiving around 7.5% annualized returns on them and don't really care which way the price of the stock/ETF goes. I also receive any dividends the stock/ETF produces which adds to ROR. I do this in tax-deferred/-free accounts to avoid an early call causing an unplanned taxable gain.
Statistics: Posted by gougou — Sun Dec 22, 2024 1:14 pm — Replies 14 — Views 1092