SOL wrote: ↑Tue Mar 08, 2022 5:33 am
If one has the patience then one of the best ways to get into TI recommendations would be to sell puts on plays that we issue (lower risk and ones that you like). You might not get all the shares assigned to your account but you will be walking away with a good profit. When the shares are assigned you will get in at a price that is generally 5 to 10% lower than any other TI member that has not used this strategy. It would relatively easy to earn over 20% using this strategy per year and your risk would be reduced by a factor of at least 75%. However, as they say most individuals while claiming to be risk-averse don't want to follow a boring strategy that over the long run yields incredibly superior results. These low-risk traders are risk-averse based on perceptions (in other words they perceive themselves to be risk-averse) but their actions illustrate that they are risk-takers and the worst kind of risk-takers otherwise known as gamblers. In other words, the secret desire to lose syndrome is what afflicts 90% of individuals.
For obvious reasons we cannot put this great strategy into play as it would be a nightmare dealing with the emails and fills and then assignments. However, we can provide guidance for this strategy. Eventually, our goal is to not only offer advisory services but real teaching services where individuals are taught tips, tricks and strategies to maximize their gains without having to take undue risk and without any of the hyperbolae that comes when one signs up for most services. However, there is no timeline yet for this. It will be done when the time is right or my parrot learns to curse in three languages.
Here is a potential way to turbocharge a put/ covered call selling strategy.
You have a share in a stock. Look for a call that offers a good premium. aim for the shortest time possible. If the stock is trading close to your strike price. Sell a put that offers a decent premium but with the shortest time premium one can find. Now if the shares are taken from you because the stock closed above your strike price. you will now earn another premium from the put you sold. In this manner, you potentially double your return. You can then wait for a pullback before getting into the stock again or look for a replacement candidate and start the whole process again.
Another variation if you are not looking to sell puts would be to buy the original call back and sell another call that is further out of the money; this method is for those that want to hold onto the stock.
Another option one should never forget is to use the DRIP option on any stock that offers a dividend. Combine this with the selling of covered calls and cash puts and it can really add up over the years.
The best time to put the Selling covered put and Selling cash put combo strategy into play is when the stock is trading around the neutrall zone on the monthly charts. The MACD's should be trading below 65.00 or any indicator that you use should be at most trading below the minium overbought ranges. This represents the optimum period to sell both
Look at the image below.
Why is it the optimum period to sell both, because of volatility. You can use it to jump in and out of covered calls or cash puts or sell them with short time premium so that your odds of winning are high.
The best time to sell a put if you are looking for a large premium and looking to get in at a price that is possibly even better than an screaming buy is when the stock is trading in the insanely oversold ranges. First of all the premium will be high and secondly if it gets assigned to you will get in at a mouth watering price. The best time to sell covered calls if you want to hold onto the stock is when the stock is trading in the insanely overbought ranges. Another option would be to sell a covered call that is 1 to 2 dollars out of the money, which means the odds of the stock being called will be high. Then you wait for the stock to pullback and sell a put to get in at a lower price. To ensure that you get in, after the stock has pulled back sell a put that is 1 to 2 dollars out of the money. Another option let the stock get called and use those funds to get into another strong stock that is trading in the oversold ranges. Better yet sell a put on it and once assigned start selling far out of the money calls.
