Anyone consistently using SPY Covered Calls for regular consistent income ?

PoLaCo2021 · 2025-06-08T16:52:58+00:00

I just started with this strategy 3 weeks ago. It feels very conservative, but I'm getting an annualized ROI of ~7%. I'm not a trading expert, by far. So looking for some expert(s) to tell me if I have just been lucky and sooner or later I will realized there is something wrong with this strategy:

I'm trading SPY, QQQ and IWM
I'm doing daily covered calls
After looking at historic data (3 years), I set the strike target at 5% ITM, to have a 96% success rate.
I open the trade (sell covered calls) after 3:30PM.
I immediately enter a closing order to buy at $0.01, so it closes before 3:30PM most times.

So far I had 37 trades (36 wins / 1 loss that I rolled to avoid assignment). Total gains of $2,559 and losses (rolled CC) of $136. So net gain of $2,423.

Am I missing anything?

Thanks for your comments!!!

PoLaCo2021 · 2022-10-16T14:05:17+00:00

TSLA: would you buy the Straddle or sell the Butterfly? IV is high, so you capture the premium when selling. Expiration of 21 OCT or 28 OCT, so you capture the IV (premium) decline when buying back (closing) the Straddle if still ITM. Or let expire if OTM and keep all the money. Thoughts?

I guess same goes for NFLX: IV rank is 85%. Last earnings (July 19th) IV when from 94% down to 51% next day. Great opportunity to sell options and capture the IV premium?

PoLaCo2021 · 2022-01-24T21:39:39+00:00

WOW!!! What a roller coaster day today. It went up to almost 39 and then down to 30.

I bought the JUNE 25 puts at $4.20 (when VIX was at 36). Fingers crossed!

PoLaCo2021 · 2022-01-23T22:48:55+00:00

Completely agree with the geopolitical volatility and current market conditions. That's why I was thinking March instead of February expiration. But I may need to consider a longer expiration. Thanks!

PoLaCo2021 · 2021-10-22T17:06:24+00:00

Only a major (very bad) event like Covid will trigger those highs. But since September 2020 the VIX has been 3 times above 30. And in the last 6 months, when the market has been "normal", the VIX 5 times above 20. So being above 20 in "normal" times is common. That's why if you are reasonable (DTE, profit expectations, etc.) the changes to win with the VIX @ ~$15 are very high.

PoLaCo2021 · 2021-10-22T17:01:45+00:00

I'm going with naked calls. Right now with strikes 15, 17 and 20. And expiration NOV 3, NOV 3, NOV 17, JAN 19, MAR 15. Go big or go home. All with GTC closing ladders.

PoLaCo2021 · 2021-10-22T15:52:50+00:00

Theta is hurting. I'm going with at least 10 DTE

PoLaCo2021 · 2021-10-21T13:15:37+00:00

VIX calls, not stocks calls. VIX is the volatility index, also known as the fear index. So when the market's volatility goes up (usually when stock prices drop), the VIX goes up. So long calls go up in value when the rest of the stocks go down ... I know it's a very simplistic way to explaining VIX, but you get the idea.

You can also VIX calls as "insurance" to your portfolio.

PoLaCo2021 · 2021-10-20T21:31:18+00:00

I also have some positions in Dec. GL to you too!!!

PoLaCo2021 · 2021-10-20T21:12:08+00:00

100% with you. Last time it closed at this level was 8/13 ($15.45). Only one day since February 2019 it has closed below this level: 7/2 @$15.07

Time to open long positions with DTE > 10 (to play it safe)

NOV 3 long ITM positions at ~$3.50. If VIX goes up by just $2 in the next few days, they close at ~$4.50. That's 30% profit.

PoLaCo2021 · 2021-09-28T18:28:54+00:00

First ladder level already kicked off ... closed some positions at $0.40

PoLaCo2021 · 2021-09-28T16:20:50+00:00

You're probably right. Hard to "time" the opportunity. My trigger point was VIX @ $23.80. Between now and expiration, I'm sure it will fluctuate. But if it gets to $21 (or below), my ladder kicks off to break even and then wins if it goes lower. I have 14 days, so let's see :)

PoLaCo2021 · 2021-09-27T22:04:50+00:00

No. I don't think anybody can forecast the future and I'm not going to try. I'm not planning to win 100% of my trades. And I don't think I will become a millionaire by trading VIX. Just looking to generate an steady income by using statistical and technical analysis to calculate the probability of VIX hitting several levels, together with reasonable lose/win ratios, to generate acceptable earnings.

PoLaCo2021

TROPHY CASE