Creating some yield

General Discussion on the Permanent Portfolio Strategy

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dutchtraffic
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Creating some yield

Post by dutchtraffic » Tue Oct 11, 2016 1:29 am

Is anyone selling covered calls on their ETF holdings? Some OTM calls with a delta of lets say 20 or 30 should get some cash flowing.

I think this could have tax implications for US holders, possibly making it less interesting (?)
However, this does not apply to some people (including myself).
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PeteKoziar
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Re: Creating some yield

Post by PeteKoziar » Tue Oct 11, 2016 12:29 pm

I found that covered calls on ETFs don't yield a whole lot. I invest in individual stocks for writing the calls.

Tax implications don't worry me - I'd rather make some money, even if it's taxed, than nothing at all.
dutchtraffic
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Re: Creating some yield

Post by dutchtraffic » Fri Nov 11, 2016 3:47 pm

I can't believe nobody is doing this....?

I'm using this portfolio now and writing weekly calls with 20-30 delta on all assets except MINT ofc.

20% cash: MINT
20% stocks: SPY
20% stocks: EFA
20% gold: GLD
20% bonds: TLT

And calls on these ETFs deliver a lot more than just "a tiny return", especially when returns going forward are expected to be very low, this is exactly the moment to benefit from covered calls, especially when enough OTM to still profit from good upside.
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