Noob question on options trading. I've got some old non-volatile blue chip stock I'm fine holding or selling, but mostly holding due to tax reasons. I'm considering selling covered calls on it given these parameters. Can someone tell me whether it's even +EV to basically just blindly sell short term deep otm covered calls on this stock? It seems like it'd pay like 3%/yr if I kept doing it, and be unlikely to hit.

However, I can't tell if this is just giving away EV to people that know how to price options or not, or if it's +EV because people use this for insurance purposes and on average will pay a marginal premium.

My understanding is that there is backtested research that blindly selling CCs is , on average, more profitable than just holding a stock.

In theory, selling covered calls should be +EV as you capture the volatility risk premium. But in practice, the strategy has gotten crushed. 10-year annualized return on the CBOE S&P 500 Buy/Write index is 6%, vs 13.4% for the vanilla S&P 500.

I don't think that's a good example. The CBOE is selling monthlies at just outside the money. You're going to get exercised much more frequently(pretty much every time)and then buy again higher.

I'd be more interested in a strategy that sold .2 or .3 deltas OTM for weeklies.

And when you don't get exercised and just collect the premium you're not having to buy at a higher price each cycle.

K, never mind all the studies on this look at the CBOE buy/write index too. I’m sure your arbitrary strategy of 0.2-0.3 delta on weeklies is well thought out, judging by the quality fish logic about getting exercised and buying back higher.

Great well thought out response.

All the studies are using buy writes that sell slightly otm. Which is obviously going to under perform in a bull market vs buy and hold by definition. So not sure what you're argument even is.

T5x

i'm a complete noob, but so long as you find liquid markets with volume and low spread then you will be selling them at a price the market agrees upon and thus wouldn't need to worry about whether or not they are priced correctly but rather whether or not you should be covering

it's when you see just a handful of bids and offers with a large gap between them that you're likely to get exploited

Short puts is usually imo a better way to go than covered calls. Same risk profile fewer transaction costs. Nobody that I know disagrees about the risk profile,some disagree about managing the risk.

Why a covered call and a short put have same risk profile

Alright just stuck £500 on bitcoin, let the fun begin!

(bit of spare cash after doing tons of matched betting, can't think of anything to spend it on at the moment since everywhere is still shut etc, hopefully back to some sort of normalcy soon aka casinos back open lol!)

Hello all

I am new to investing, I have 0 stocks or shares or investments.

I have 20K laying around that I have decided I want to put into the S&P500. What is the cheapest/most cost effective way of investing my 20k into the s&p500?

Many thanks

You'll need to send that money to a brokerage—Fidelity, Vanguard, Merrill, etc.—and then purchase an index fund that represents the S&P 500. For example, you could open an account at Vanguard (it's free; just go to their website or call them), transfer the money from your bank account to your new brokerage account, and then buy the index fund. Index funds are known as ETFs, and the cheapest ones that track/represent the S&P 500 are VOO (which, coincidentally, is run by Vanguard) or IVV (which is run by BlackRock). These are the cheapest, which is to say they have the lowest expense ratios (essentially the term for fees)—in this case, 0.03% of your investment per year.

any buy-write strategy is, by definition, a risk-reduction strategy. So you will *always* underperform over the long-term.

if you think you can forecast short-term index movements: 1) just short when it's going down why buy anything, and 2) You can't.

I’m sure it’s been asked many times but what are some good resources to learn about options trading? I buy 80% ETFs for the long term and some equities with the rest but I’d like to learn about options.

Is there a brokerage that has reasonable account security? My requirements would be:

1. maximum password length of at least 30 characters
2. 2FA via software OTP (like authy) or hardware (like a yubikey)
3. a phone number cannot be used as a password reset option

I had a Fidelity account for a few years and they failed all 3.

Hahaha all traditional banks have the worst security procedures. It's embarassing really. Like max 12 length password and only 2FA option is SMS. facepalm.

Fidelity will accept "password" as a password. I wish I was kidding.

The best trad-fi account I've ever had in terms of security is chase, and it's still nowhere near as secure as my twitter account. Max password length is 32 and I can use email for 2FA. And to setup email 2FA I had to call them and get a lecture from the CS lady about how they can do it via email but SMS to a native cell phone number is SO much more secure and I should consider doing that. I resisted the urge to yell at her and tell her to google sim-swapping and stfu. They won't even let you 2FA with a google voice number, it has to be a sim-swappable mobile number.

Hello --
What are the rules about posting on behalf of a hedge fund (not my own). I would just post a brief description where ppl could PM if it's something they want more information on. The sticky thread "links and rules" says "no spamming" which I interpret as "don't excessively post your own investing advice or sell your crap" not that you can't post at all..? Thanks for any reply

"... on behalf of ..." and "... ppl could PM ..." would make it spam (by proxy), imo.

Yeah, I think it's safe to say it's a 'no'. Anyone here who is sophisticated enough to be investing in hedge funds is capable of finding them on their own.

I use a Yubikey with Vanguard.

Hi everyone. I am newbie here. Have a nice day everyone)

what is a spam then by definition on this site? you're not allowed to try to sell anything? we have a whole forum dedicated to poker coaching.
thanks

so what? how does that have anything to do with whether it should be allowed or not on this forum?
thanks

I believe I can answer those questions for you. The people you quoted are in charge of making the decisions and they decided. If they decide it is spam (or otherwise disallowed) then it is spam (or otherwise disallowed).

The nice thing is that I agree with them.* Not for any other reason than that it is good to outsource my decision making on such things.

*Making it a very popular view with at least three in favor of whatever they said, and perhaps one not in favor.

This is not spam guys. It's a hedge fund making 23.5% annual returns dating to 2019. Can provide all performance records, quant stuff if you're into that. They have all legal, regulatory set up. This is a legitimate opportunity. I don't know what this site qualifies as spam (or, obviously, have any power to control that) so just let me know. I'm not gonna waste time litigating this with you guys if I'm not allowed to post about it that's fine. It's not a big deal. I definitely don't understand what the point of having a subforum on this site devoted to investing if you're not allowed to post about investment opportunities that are not spam. That's why I queried about posting.

Looking forward to the replies of the actual moderators. It's a little ridiculous that you've joined into this acting as if this a group consensus decision whether I'm allowed to post or not. Pretty OOL and disrespectful to me.