Hey everyone.
Been doing some huge discovery of what I want a 10 year strategy to be.
Here is my idea, let me know what
You guys think.
So say I have 55k. I buy 1000 shares of QQQI at 54.60
Currently a Jan 16 55 call is going for $0.35 or Feb 20 55 call for 0.60 cents.
So, I buy the 1000 shares, and I sell covered calls. The covered calls could add about 0.5-0.7% every month.
I will not let these calls assign, this is because I want to collect the monthly payout (13.5% yearly paid monthly) every month without a skip.
So, if QQQI drifts up, I roll the covered calls forward and up for break even or a small credit.
If QQQI goes down I let call expire and sell another one.
Reinvesting the monthly payout and the premium from the covered calls back into QQQI will really help this position compound.
At the same time, I can sell puts secured by my portfolio, on stocks I want to own. Small
Amounts though. I’d be looking for another 0.7-1%/month yield on the portfolio from cash secured puts.
I’d then use the put premiums to make positions in equity stocks.
The QQQI would be held in tax free accounts the cash secured puts would be sold in my taxable account (Canada)
If you are picking up what I am putting down, what is the drawback to this? I am estimating I could get a 25%+ yield as long as I properly manage the secured puts and follow very strict rules on them.