would query your ANZ calls.....???
*edit* just read the rest of your post.
*edit* just read the rest of your post.
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how can I possibly argue with that?
But why not do what the rest of us do and do it in private?
Meanwhile I'm still playing around with my miners. I never knew it would be so easy. I'm up over 100% close to 200% since the market low.
I'm having some early luck buying silver futures, just going with momentum in the VERY short term. This started when I got up at eleven to watch some cricket. As always I look at the gold price first thing, and noticed that it had collapsed but was recovering nicely. Silver had collapsed too but had not recovered so I decided it was time I learnt the mechanics of my trading platform. I fiddled around a bit but made a nice profit an hour or so later. I think this is repeatable if you are selective about the moves you ride. It is just as easy to go short if the price is collapsing after a jump. Brokerage on a single contract is US$11 so much lower than trading covered calls.
I must repeat my disclaimer that this is pure speculation and is not investment advice.
Any update chilliaa? Looks like your WES won't be exercised, & rolling up/out on the banks will be a lot cheaper today.The reason for keeping NAB and WBC is my principle when uncertain to stick to the 'middle ground'.
WES looks like it could also be excercised ($28.5 strike price) however in this case my decision is much easier, one option will be excercised and one rolled, this will enable me to take 50% of my position off the table.
Seems to be very high volumes going on in the banking sectors last few days, once some of the data on companies performance sinks in,imho willair.This has resulted in a big hit to my 'net profit' from writing options. (refer attached schedule, but not it doesnt include the dividends that i would otherwise not receive if i allowed the options to be excercised).
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Any update chilliaa? Looks like your WES won't be exercised, & rolling up/out on the banks will be a lot cheaper today.
Bought back Wes calls yesterday at 15c.
Rolled one cba yesterday to $52 Jan10, paid 50c for the privilege.
Basically im taking part profits on part of my banking portfolio:
1) letting all anz be called and 1 cba be called.
But i dont want to exit the whole position.
Will make for some interesting discussions later, especially as the 'profit' from writing the calls has essentially been wiped out by protecting the remaining positions.
But now i need to focus, the markets coming down nicely, so i need to concentrate.
Ok now on to a bit of reflective thinking.
Whats the sought of profit potential:
Over 3 months the profit from writing covered calls was around $10,000 (before paying for purchasing back contracts on positions that were at risk of being called and for which i didnt want excercised). Capital at stake was around $450,000.
So this represented a return of around 2.2% over three months.
Be careful when people talk about returns of a couple of % a month and then annualise that (eg 2% a month which 'could' be 24% on an annual basis). There are several risks with this, firstly it might not include transaction costs.
Secondly its not always possible to keep writing the positions at 2% a month.
For example in the first month you might get 2%, but if the contract isnt out of the money at expiration you probably will receive a lower income in the second month when you try to roll it up and out.
For example: you write a covered call against XYZ for $25 in the first month for 50c (2%).
At the end of the month if the share price is say $25.5, you wont get that 50c as easily.
Now i compare this with my share portfolio (with of course most of the profits being unrealised).
My starting capital at 1 sept was a net position of $1,076k (ie gross minus debt).
My 'ending' capital as of today is roughly a net position of $1,385k. Hence an increase in capital position of $309k over the three month period.
For a 3 month return of 15%.
So whilst the income from covered calls is nice, i think the primary success of the investment will be determined by the stock selection process and not the covered call strategy (2.2% against 15%).
Now yes the market went up during this time, but there will be periods when the market goes up, periods when it goes down and periods when it goes flat.
The point here is that with a geared portfolio attention needs to be paid to the portfolio itself rather than to the covered call strategy.
With an ungeared portfolio a covered call strategy will have a greater impact.
Very impressive, Mate. Is your portofilio geared? Do you invest in properties? (if not, why not) are you doing this part time or full time on your shares?