Soma Purana

In the previous post I alluded to a major benefit of covered calls that sometimes forces you to get rid of a stock for a capital gain. " Investors are always trying to time the market. They want to get in at the lows and get out at the highs. While this simplistic goal sounds easy, it is almost impossible to achieve." It definitely has been very difficult for me to achieve. The major problem in achieving this goal is we don't know and can't decide "how low" and "how high." With my covered calls strategy, I don't much worry about how low when buying a stock. I only consider the quality, dividend yield, and potential to grow. Then immediately I sell a weekly call on it with a higher strike price (at least 1% higher). I earn a premium. If the call is assigned then I have sold the stock at a gain, may be the stock will move even further up in the days  following assignment, it does not matter. I have sold the stock at a gain. Buy low, sell h

I have been trading options (primarily selling covered calls) for about six months now. I have made almost 300 trades in this time. Some observations I have made are as follows: If there is more bullish sentiment out there, you can sell more covered calls. Therefore trading is not uniform every week or every month. Options trading requires enormous patience and effort.  If I enter 10 covered calls, sometimes three or four get sold, sometimes none get sold. This whole experience is very similar to what I had observed back in my village when I was a child. One of the Annayyappa's (the younger one) had a general store which his father tended. His father spent his entire life sitting and selling items in that store. He died at over 100 years of age in that store. The son went every week to Chinthamani to buy items in bulk and stocked the store. The father decided the prices more or less at the time of sale. They hoped they are selling at higher than the purchase price at least m