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My Covered Call Blog <br /> <b>Deprecated</b>: Non-static method HeadSpace2::reload() should not be called statically, assuming $this from incompatible context in <b>/home/rickdahl/coveredcalls.rickdahl.com/wp-content/plugins/headspace2/modules/page/page_title.php</b> on line <b>77</b><br /> <br /> <b>Deprecated</b>: Non-static method HeadSpace2::get() should not be called statically, assuming $this from incompatible context in <b>/home/rickdahl/coveredcalls.rickdahl.com/wp-content/plugins/headspace2/models/headspace.php</b> on line <b>284</b><br /> <br /> <b>Deprecated</b>: Non-static method HS_InlineTags::replace() should not be called statically, assuming $this from incompatible context in <b>/home/rickdahl/coveredcalls.rickdahl.com/wp-content/plugins/headspace2/models/headspace.php</b> on line <b>188</b><br /> <br /> <b>Deprecated</b>: Non-static method HS_InlineTags::replace() should not be called statically, assuming $this from incompatible context in <b>/home/rickdahl/coveredcalls.rickdahl.com/wp-content/plugins/headspace2/models/headspace.php</b> on line <b>188</b><br /> <br /> <b>Deprecated</b>: Non-static method HS_InlineTags::replace() should not be called statically, assuming $this from incompatible context in <b>/home/rickdahl/coveredcalls.rickdahl.com/wp-content/plugins/headspace2/models/headspace.php</b> on line <b>188</b><br /> » My Covered Call Blog
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Rick’s Strategy

Goals

  • Produce 12% return annually with option premium.
    • I want my option premiums to return 12% of my starting capital yearly.
      • Start with $20000
      • Year 1 premiums: $2400
      • Year 2 premiums: $2688
      • Year 3 premiums: $3010.56
  • Have my underlying holdings return 3-5%

Open position criteria

  • Position must return 30% annualy
    • All annual returns based on being able to use the money 12 times a year.
    • To calculate: (1+Return) ^ (12/number of expirations held for)
  • If dividend is included, yield must be greater than zero if called away early
  • Selling of first option should return 20% of initial investment
    • Removed on 1/6/2009 as the volatility collapse doesn’t allow profit on Deep ITM calls anymore.

Roll Up (and out) criteria

  • Rolling up (and out) must not decrease annual return

Underwater Positions

  • Calls 2 to 3 strikes out of the money will be sold on underwater positions