Seller's Paradise

Put writing is essentially the same as covered call writing; same profit & loss curve for the same strike and expiration date. There are a few tiny differences (see Naked Put vs. Covered Call). Recently, Oleg Bondarenko at University of Illinois at Chicago did a deep analysis of put writing on the indicies. His main findings:

1. Over 30 years, the PUT index outperformed the traditional indicies on a risk-adjusted basis.

2. Over the last 10 years, the WPUT and PUT index delivered similar risk-adjusted returns, while both outperformed the S&P 500 index.

3. Over the same 10 years, the WPUT and PUT index had lower standard deviation, lower beta, and lower max drawdown compared to the S&P 500.

4. From 2006 to 2015 the average annual gross premium collected was 24.1% for PUT and 39.3% for WPUT (WPUT uses weeklys, and PUT uses monthlies).

5. Trading volume in the weekly S&P 500 options has increased dramatically over the last 5 years. In 2015 there was an average volume of 340,000 contracts per day (36% of all CBOE S&P 500 options).

Impressive stats, and almost identical to what several covered call studies have shown in the past. To read the reports yourself, see the Put Writing Study and Multiple Covered Call Writing Studies.

Alexander Green, Chief Investment Officer of The Oxford Club, recently wrote some advice on how to make money in a sideways market: Use covered calls.

He points out that in the last 18 months this strategy worked well given the relative sideways action of the market. For his own words, and a few caveats, see his article at Investment U: The Best Investment Strategy for a Market Like This.

Two of our strategies using weekly covered calls with AAPL continue to perform better than the Buy-And-Hold strategy for AAPL, beating buy-and-hold by 4.5% and 5.0% after 21 weeks.

AAPL is down 1.2% for the year so far (including the 2 dividends since the start of the year), but our 12%/year strategy is up 3.2% year to date, and our 24%/year strategy is up 3.8% year to date, and they've done so with considerably less volatility than buy-and-hold. To see all the trades, visit 21 Weeks Of AAPL Covered Calls.

With 3 days to go until this Friday's weekly options expire, the top 4 covered calls Born To Sell members have written are (in order of popularity):

(Note: Born To Sell members have access to the full Top 10 Covered Call list, as well as having this list update real-time as members change positions. These are not recommendations, they are merely a reflection of our members' current positions.)

Currently, the top 8 stocks Born To Sell members are using for their Watchlist are (in order of popularity):

(Note: Born To Sell members have access to the full Top 20 Watchlist, as well as having this list update real-time as members change their watchlists. And, you can have the highest yielding covered calls from your personal watchlist emailed to you after the close each day. Never miss a fat premium from your watchlist again!)

Born To Sell is dedicated to only one thing: Making Money With Covered Calls. Our subscribers have access to state-of-the-art covered call screeners and covered call portfolio management tools. For less than the profit of a single trade you could be enjoying recurring monthly income using our tools. Three subscription types to choose from:

Plus, all subscriptions begin with a no-obligation 2-week free trial. What are you waiting for? Start collecting premium today!

Happy Trading,

The Born To Sell Team