Ever since March, I've been stressed over writing Covered Calls on DNDN, trying to make 2% each month at option Strikes that were below what I paid for the stock, since the stock fell. And it fell a lot.
This month, the entire portfolio of stocks is down a lot, so except for YPF, I can't write a Covered Call for options expiring in June without choosing a Strike that is well below the price I paid per share. I might still get 2% ROI on each stock, but that involves a lot of watching, speculation, and stress. And I could be wrong, like I was in March and especially in April, where there was a huge 3% loss in just days.
If I were to remove speculation entirely, I could by selling Covered Calls for options expiring several months ahead. I would gain a certain amount of peace of mind and reclaim a lot of time watching the market and stressing out. In exchange, I am giving up potential gains -- capping any profit from the stocks going up a lot suddenly. And these are all volatile stocks to begin with.
After thinking about this more intently over the last couple of days, I think this will be my new strategy for stocks that have fallen a lot in value. It goes back to the original principles of not speculating and not spending a lot of time watching the markets.
There will be some idle cash in the portfolio because of this, and I think I will spend it on dividend-paying REITS. Looking at CIM at the moment.
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