So all my previous cash secured puts expired and I kept the premium. Now I have bought three more against two thousand usd cash, one at 9, 9.5 and 10. I still hold a long call at 10 and have sold a call at 11.85. It’s currently trading at 10.35 so I’m doing OK. I got about 30 US in premium so I’m earning perhaps 12% on my cash.
I also bought jegp, the JP morgan world covered call income strategy and this is down, and it’s dragged me down overall – in terms of pure options, I’m up. Wo-hooh!
I opened a new account with tastytrade and am having trouble funding it; I’m still working on that.
So I was thinking how to extend the options plays. I do have a position in gold, in a tax advantaged account and am likely going to move it out. One idea is to use a portion as options play. Gold, GLD, is too expensive, the the goldminer etf GDX is cheaper. It would only cost six K. or so to trade it, so I decided to compare the past performance, are these two correlated?
The premiums here are monthly.
So I might be able to get 100 a month, or perhaps much less as it ties up five or six thousand, so even 50 a month is giving me ten percent.
The problem with this is that GDX lost nearly half it’s value for a couple of years recently, and it pays a dividend of 0.8% if I’m bag holding a long time. GLD lost value over the same period and so it’s perhaps OK to put a portion of my gold allocation in, perhaps a third? It’s something I’m looking into.
Another thing I’ve been thinking about is my long-term position in IWDG. This is the ishare core world currency hedged. It consists of 23 developed countries, holding 85% of the companies in each country, USA 71.4%, Japan 5, UK 3, Canada 3, france 2, Germany 2, Australia 2 etc. I like it because it’s so wide spread, I really use it as a cash fund, although I’ve never cashed out. It’s in my tax advantaged account, but I can sell it and buy some income stock I have outside the account, and sell the latter, to repurchase… so essentially I can transfer the cash into my general account without penalty, if you see what I mean.
Well it’s quite a lot as I’ve never withdrawn from the tax-free account, as dividends come in, I buy IWDG and live off what I have outside of it.
But one idea would be, once the cash is outside, buy spy for the US part, but the a world ex etf to play options off, for example VEU. The geographical make up is EM26%, Europe 41, Pacific 25, UK 9, china 8. I don’t like China, but it’s kind of OK. The price is under 7k at the minute.
These are 45 day premiums and there is low volume.
This is IXUS, which is very similar, 45 days out and very low interest here.
Update, my PMCC
Update on My Poor Man’s Covered Call on Ford
As of 09:02 PM +07 on July 11, 2025, Ford’s stock price stands at $11.91, and I’m reviewing my Poor Man’s Covered Call (PMCC) strategy on Interactive Brokers. I initially purchased a LEAP call with a $10 strike, expiring one year out, for $130 total, covering 100 shares. To generate income, I sold a call with an $11.85 strike, 100 days out, for $0.29 per share ($29 total). The screenshot (included below) shows the current call’s market value at $66.72, daily P&L at $2.94, position at -1, average price at $0.29, cost basis at $0.29, total return at 128.4%, and unrealized P&L at $37.50. Initially, I mistook the $37.50 as profit, but it represents an unrealized loss if I buy back the call at $0.64 ($64 total), a $35 difference from the $29 received.
Let’s break down the screenshot figures:
- Main Price (c0.64): The current market price of the sold call, $0.64 per share ($64 total), reflects Ford’s $11.91 price being above the $11.85 strike, making it in-the-money.
- Market Value (66.72): The total current value of the call, roughly $64 with minor adjustments for bid-ask spread or fees.
- Daily P&L (2.94): The day’s gain, approximating the rise from $0.29 to $0.64, adjusted for market movement.
- Position (-1): Indicates my short position, having sold 1 contract.
- Avg Price (0.29) and Cost Basis (0.29): The price I sold the call for, totaling $29.
- Total Return (128.4%): Reflects the premium received ($29) against the LEAP’s $130 cost, adjusted for strategy dynamics.
- Unrealized P&L (37.50): The paper loss if I buy back at $64, a $35 difference plus minor adjustments.
The confusion arose because the call is in-the-money ($11.91 vs. $11.85), suggesting a loss on paper. However, if exercised, my LEAP covers the obligation. Exercising the LEAP to buy 100 shares at $10 ($1,000) and selling at $11.85 ($1,185), plus the $29 premium, yields $214. Subtracting the $130 LEAP cost, I net $84, meaning the $37 loss isn’t realized. This hinges on assignment, with the LEAP’s intrinsic value ($1.91 per share, or $191 total) plus time value supporting early exercise.
I considered alternatives. Buying back the call and holding the LEAP risks a loss if Ford drops (e.g., to $9.50, potentially $95-$115 total loss including the $35). Exercising the LEAP, buying back the call, and selling shares nets ~$26, but sacrifices time value. Rolling the call—buying back the current position and selling a new one—emerged as a viable option. The option chain showed a $12 strike, 133 days out, at $0.83 ($83 total). The roll screen lists buying the $11.85 call at $0.62 ($62) and selling the $12 call at $0.83, with a net price of -0.20, indicating a ~$20 credit (adjusted for possible fees to $18-$19). This reduces my $35 loss to $15-$16.
Rolling poses challenges. A higher strike (e.g., $12.50) might yield pennies (e.g., $0.20-$0.40), and a premium exceeding $64 requires a far-out date unless volatility rises. The $0.83 premium works because the $12 strike is near the current price. If Ford rises to $13, the new call could reach $1.20 ($120), creating a $37 loss, though the LEAP gains (~$300+). If Ford falls to $11, buying back at $0.40 ($40) yields a $43 profit, but the LEAP dips. The $10 LEAP covers the $12 obligation, limiting downside to the $130 cost minus premiums.
I’m considering to roll to the $12 strike, 133 days out, for the $20 credit. This balances cost, time, and risk, with the LEAP as protection. I’ll execute via Interactive Brokers’ “ROLL” tool, confirming the credit, and monitor Ford’s price. A rise leverages the LEAP; a drop allows adjustment. This strategy taught me to weigh premiums, coverage, and market trends.
Disclaimer: Nothing on my sites is financial advice.
