RE:RE:A strategy during the Waiting GameHi There:
I really can't break it down in detail until tax time as it is really complicated given open positions where you show a temporary loss on one set of options that will turn into a profit when the next set expires. But my TD account indicates that stock and options combined I am up 65.10% in the last 12 months and 45.7% Year to date which is due of course to the nice recovery going on ...However the strategy has protected me from the downside when I do it consistently - but there are judgements involved such as one to ease off as one approaches earnings or after the stock has moved lower to not always rush to put a position of options on.
You make much more if your option expires worthless but if that is because the stock drops then your returns only can be assumed to be real if the stock eventually returns to where it was before...so complicated. However one example I sold on Nov 1st an option that expires Nov 12. If I did that 26 times during the year I would make about 17.5% enhancement over just holding the stock. The very high YTD returns are because I kept buying more stock as ALA went down and bought and sold some at different times. Not very clear but it gives you an idea. I think I enhance my returns on average by over 10%.. Cheers John