With capital preservation as our most important priority, we begin as always with a focus on index covered calls, which mitigate company specific risk.
Writing covered calls on ETFs, such as QQQs, is attractive to conservative investors who may not have the time to monitor a selection of companies on a watchlist and wish to avoid risks associated with trading specific companies, such as earnings surprises.
The QQQ options at strike $137.00 for June 2 2017 are offering a 1.36% return, which annualizes at a rate of 18.32%.
Chart for QQQ
The DIA options at strike $210.00 for June 2 2017 are offering a 0.70% return, which annualizes at a rate of 9.50%.
Chart for DIA
The SPY options at strike $239.00 for June 2 2017 are offering a 1.15% return, which annualizes at a rate of 15.52%.
Chart for SPY
* Prices quoted were as of time of writing and may not be current.
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