SPY covered calls with protective puts

In and out with the big jump on Wednesday

January 21, 2013September 1, 2010 by

At 9:51 EDT Wednesday I was setup for a couple days with my purchase at of SPY at 106.73, long S104 3-Sept puts at .23 and short S107 3-Sept calls at 0.80 for a breakeven of 106.16 and a max profit of 0.84. Twenty minutes later I closed out SPY at 108.11, S104 puts at .08, and bought back my calls at 1.62 for a …

SPY covered call with protective puts

May 14, 2023August 15, 2010 by Vance Harwood

The biggest downside of covered calls is their lack of downside protection on the underlying. A big, but not unusually big correction can wipe out many months worth of profits. One strategy for reducing this exposure is to buy puts, but when I have looked into this strategy in the past the puts were either so expensive they ate up all the profits, …