articles on covered call options

[poker1O1]

Hey guys, I need help finding good articles on covered call options that have been published within the last year. Thanks in advance.

[poker1O1]

more specifically, the relationship between calls and writing them.

[DesertCat]

Not sure what you are trying to learn, but just in case, do you understand that if you are a long term investor selling covered calls you are selling your upside?

[skindog]

I've heard of a study saying that covered call writers perform better than ordinary stockholders over the long run. I've sorta seen this from my own experience with covered call writing - it's not rare that I get a >1% monthly return while only selling my upside above a 20 or 30% return on the stock. Think about that - writing seems pretty lucrative. If anyone knows of any such article/research, please throw it my way. I suck at searching and haven't been able to find anything.

[DesertCat]

If it were true that cc writers were more profitable, it means that calls in general are overpriced. I see no evidence of this. You have been lucky so far but you have a small sample size. Someone else is likely complaining that their favorite long term hold just spiked thirty percent and got called out from them, costing many times more than the premiums earned.

[skindog]

well, here's what I'm saying - the stocks I'm writing covered calls for can rise 30% and still won't reach the strike price - and I'm being paid about 1 or 2% a month. If I wrote within 10% of the strike price I could get 5 or 6%. I have no hard data to support it for you, but I wouldn't be surprised at all if calls were overpriced for some stocks.

[RarocASP]

[ QUOTE ]
I've heard of a study saying that covered call writers perform better than ordinary stockholders over the long run. I've sorta seen this from my own experience with covered call writing - it's not rare that I get a >1% monthly return while only selling my upside above a 20 or 30% return on the stock. Think about that - writing seems pretty lucrative. If anyone knows of any such article/research, please throw it my way. I suck at searching and haven't been able to find anything.

[/ QUOTE ]

Depends on the mkt environment and if you are hedging the stock and options 1:1

If 1:1, then why not just sell deep puts outright? (I guess it makes sense if there are capital recs for retail customers)

[adios]

A covered call is equivalent to shorting a put but probably will have higher transaction costs and tie up more capital. Shorting the put is thus probably a better way to go but not a good way to go IMO.