Greetings, everyone,

You will enjoy the presentation which follows:

https://www.youtube.com/watch?v=m_uPMQ-IlIs

The presentation is about an hour long and it is quite likely that you could learn something useful from watching it.

Contact me if you have questions.

I send my best personal regards,

Milan 😃

Greetings, everyone,

You will enjoy the presentation which follows:

The presentation is about an hour long and it is quite likely that you could learn something useful from watching it.

Contact me if you have questions.

I send my best personal regards,

Milan 😃

Last Monday, July 31, our fearless, intrepid investor wrote (sold) just-out-of-the-money covered calls on SPY. She collected a nice premium income – safe, secure, adequate.

On Friday, August 4, the put/call ratio showed investor sentiment to be negative suggesting a short-term market decline. The best thing to do at a time like that is to sell just out-of-the-money covered calls on a safe security as our as our fearless, intrepid investor did last week.

The risk of selling covered calls is directly connected to the selected security. The safest security to use is an exchange-traded fund (ETF) which tracks the American economy as a whole. Of the thousands of ETFs that exist, only about six qualify in that respect. Among those, the best is SPY. It is the oldest and the largest ESP tracking the S&P 500 and has the narrowest bid/ask spread.

What will our fearless, intrepid investor do when the market opens today?

Greetings, everyone,

You will enjoy the presentation which follows:

https://www.youtube.com/watch?v=oGWZ_Mu6Suo

The presentation is half an hour long and it is quite likely that you could learn something useful from watching it.

Contact me if you have questions.

I send my best personal regards,

Milan 😃

The put/call ratio shows investor sentiment and is a reasonably reliable indicator of the near-term market direction. Nevertheless, it is a judgment-based decision. Rules-based decisions  such as the six habits of the Monday Morning Program are always right. Judgment-based decisions are frequently wrong.

That was the case last Monday, July 24, and our fearless, intrepid investor wrote (sold) just-out-of-the-money covered calls on SPY. She collected a nice premium income, but SPY rose instead of declining as expected, and she was assigned.

What will our fearless, intrepid investor do when the market opens today?

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The risk in writing (selling) covered calls is entirely due to the underlying security. If that security is an exchange-traded fund (ETF) tracking the S&P 500, it will be tracking the US economy as a whole, the best-performing economy on the planet in over 100 years.

Wall Street is constantly telling investors that past performance isn’t indicative of future returns. That is true except when it isn’t, which is most of the time. Confucius said: “Study the past if you would define the future.” We should listen to Confucius.

The best (ETF) tracking the S&P 500 is SPY. It is the oldest and largest ETF with the smallest bid/ask spread.

On Mondays, our fearless, intrepid investor writes (sells) covered calls on SPY with a strike price just out-of-the-money, expiry date, Friday of the same week.

Half the time, the weekly  decline will be greater than the premium income received during that week. Nevertheless, the premium income will be there every week. Investors can ignore any weekly decline knowing that SPY will recover over the long term, according to Confucius.

In a rising market such as we have had in the pasts few weeks, investors do better by simply holding SPY and NOT writing (selling) covered calls on it.

What will the market do in the near future? The put/call ratio is a fairly reliable indicator.

What will our fearless, intrepid investor do when the market opens today?

Greetings, everyone,

You will enjoy the presentation which follows:

The presentation is half an hour long and it is quite likely that you could learn something useful from watching it.

Contact me if you have questions.

I send my best personal regards,

Milan 😃

Greetings, everyone,

You will enjoy the presentation which follows:

The presentation is half an hour long and it is quite likely that you could learn something useful from watching it.

Contact me if you have questions.

I send my best personal regards,

Milan 😃

Our fearless, intrepid investor owns only SPY, an exchange-traded fund (ETF) precisely tracking the S&P500 which tracks the American economy, the strongest economy for over 100 years and likely to remain that way in the foreseeable future. History strongly suggests that all investors should do that.

Why?

The risk in writing (selling) covered calls is entirely due to the underlying security. SPY is not Enron or Nortel or WorldCom or any other security that fell out of bed.

Adjusting for market holidays, on Mondays our fearless, intrepid investor writes (sells) covered calls on SPY with a strike price just out-of-the-money, expiry date, Friday of the same week.

About half the time, the weekly  decline will be greater than the premium income received during that week. Nevertheless, the premium income will be there every week. Investors can ignore any weekly decline knowing that SPY will recover over the long term.

That’s what happened last week.

What will she do when the market opens today?