Covered Call Nation: May 2019

Sunday, May 26, 2019

MAKE MORE MONEY - SUPERCHARGE YOUR MONTHLY COVERED CALL RESULTS

Sunday, May 19, 2019

THE POOR MAN'S REAL ESTATE - COVERED CALL WRITING MONTHLY CASH FLOW INCO...

Saturday, May 11, 2019

MAKING MONEY WRITING COVERED CALL PAYCHECKS THEN LOSING MORE!

Core Position Trading, LLC is not registered as an investment adviser with the U.S. Securities and Exchange Commission. Rather, Core Position Trading, LLC relies upon the publishers exclusion from the definition of investment adviser as provided under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Core Position Trading, LLC does not offer or provide personalized investment advice. This site and all others owned and operated by Core Position Trading, LLC are bona fide publications of general and regular circulation offering impersonal investment-related advice to member and /or prospective members >USE AT YOU OWN RISK< and >FOR EDUCATIONAL PURPOSES ONLY<. Always do their due diligence (checking your own numbers for integrity) when putting hard earned money at risk and never risk more than you can afford to lose.

-

All rights reserved - Core Position Trading, LLC - 2019 - http://www.CorePositionTrading.com and http://www.CPTDashboard.com

Core Position Trading, LLC is not registered as an investment adviser with the U.S. Securities and Exchange Commission. Rather, Core Position Trading, LLC relies upon the publishers exclusion from the definition of investment adviser as provided under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. As such, Core Position Trading, LLC does not offer or provide personalized investment advice. This site and all others owned and operated by Core Position Trading, LLC are bona fide publications of general and regular circulation offering impersonal investment-related advice to member and /or prospective members >USE AT YOU OWN RISK< and >FOR EDUCATIONAL PURPOSES ONLY<. Always do their due diligence (checking your own numbers for integrity) when putting hard earned money at risk and never risk more than you can afford to lose.

-

All rights reserved - Core Position Trading, LLC - 2019 - http://www.CorePositionTrading.com and http://www.CPTDashboard.com

Thursday, May 9, 2019

CLOSED END FUND INVESTORS - Tips and tricks that might make you a better investor

SHOW ME THE MONEY!

Many, MANY casual stock market watchers ... even active investors have not a clue what Closed End Funds (CEF) are ... yet Wall Street uses them in most EVERY wealth management account for monthly income.

Not to bore you with an extensive lesson here but CEF's are stock like, bond like investments where a company (say Fidelity or Easton) will create a CEF that has an objective ... say, to invest in convertible debt notes ... make profits by buying and selling them and kicking down the profits in MONTHLY dividend distributions ... these CEF's trade like stocks where an investor can get in and out of them at any point in the trading day unlike Mutual Funds where an investor will be sold out at the end of a trading day.

Ok, final bit of boring stuff about CEF's ... the companies that manage these investments take investor money like an IPO and then do not take any more money ... hence the 'Closed End' part of the name which in turn does NOT dilute the investment unlike Mutual Funds that will take money at any time. Always, CEF's do not announce earnings and the managing companies do not have to report anything ... which can make them risky. With that said, it is typical for CEF's to pay 7% per year ... and looking at charts of some of the good ones, they pay that in Up and Down markets ... pretty bankable. However, you can't go to sleep on these either ... check CHI and CHY's recent dividend adjustment.

GET TO THE TIP!!!

So ... I like to find good CEF's that pay 1) Monthly 2) $1.00+ per share 3) LONG track record of keeping a stable dividend.

Eaton's ETV is one that I've recently purchased with the investment objective of collecting the $1.33 annual dividend / 12 or 0.11 cents a share monthly.

Yes, they pay its investors 0.11 cents a share every month giving income seekers, retirement income seekers a way to generate MONTHLY cash flow while investing in some pretty sound investments that have been doing this for years! ... and the annual fees for this is very comparable to Mutual Funds and in fact are less in many cases.

I would say the fee's are negligible because the CEF trades like a stock so we don't notice the fee's as it trades up and down like any other stock.

BACK TO THE POINT

MOST CEF's do not move up and down that much ... they give away profits each month so basically its gets its price action from Wall Street getting in and out based on its EX-DIV date ... so a CEF will have good volume leading into an EX-DATE and AFTER an EX_DATE because investors held the stock thru the EX and collected the DIV, they move on.

So, for me ... this ETV investment was all about collecting the $1.33 per share dividend FOR A YEAR ... nothing more, nothing less. ETV goes Up, cool. ETV goes down, not a problem ... MONTHLY CASH FLOW BABY!!!

Well look what happens to ETV ... it rallies from my purchase price of $14.80 > $15.61 ... a stock move of 0.81 cents a share ... (my arrow is WRONG ... I must have purchased it earlier because I've collected (2) dividends at this point or 0.22 cents per share)

So in a matter of 2 1/2 months, when ETV was trading at $15.61 HAD I SOLD I would have collected $1.03 per share ... or 77% of the investment objectives goal.

Here's the WORDY Tip of the Day

When you've met your investment goal THIS quick ... SELL the ETV and LOCK IN that gain. Basically collecting a year's worth of dividends in a stock move + dividend paid.

FINAL THOUGHTS

1) Had I done that ... I would have LOCKED IN my goal (basically) and had the money available to use another CEF for the next 10 months ADDING income to the story... ETV had run so good I HAD TO KNOW they would peel it back

2) Knowing that ETV will pull back ... and being flush the cash from the sale ... I could just wait for it to re-test that $14.80 and just buy it again.

Now, I buy CEF's and HOLD THEM for years ... so I've seen this movement with the other CEF's I own and have not done anything about it ... just let it ride (CHI, CHY, EOS, so on) but in this case ETV was a NEW investment for me and I could have used this idea to my advantage ...

As always, good luck and Best in Trading!

------------------------------------------------------------

Tuesday, May 7, 2019

OH NOO Mr Bill ... is the stock market sky falling?

WHAT GOES UP ...

Sometimes its best to take a step back when the markets are falling some -400 and -500 points a day.

If we do that we see that the DOW is STILL in a very BULLISH UP trend and we've some good points of support.

Recently the DOW hasn't been able to break thru resistance near that 27,000 number like it did back in October ... it tried twice in late April but just couldn't get there.

When that happens ... ANY bad news will cause Wall Street to snap ... and with Monday mornings China news they did just that ... taking profits in a big way.

Now, what does this mean? ... I feel that with Friday's positive employment numbers and with the Fed backing off raising interest rates ... its more BUY than SELL.

If I had to guess ... this pullback will fall to recent support near that 25,600 ... which means we could see another -400 points being trimmed off.

I'm a BUYER at that DOW 25,600 number (although I've already bought into this sell off a bit early ... oh well, we'll sit and watch, still have good dry powder :)

Remember, Wall Street BUYS them Up to SELL them Off to then BUY BUY them Up again ... its what they do and if you believe that like I do ... days like these can be business as usual.

Good luck, keep it non emotional and make good decisions cause I don't have a crystal ball :)