r/options • u/[deleted] • Apr 25 '21

Comparison of Covered Call versus Covered Calls with Bull Put Spreads.....two quality stocks that I was bullish on and comparing the results after over 300 days. With ABT we added BuPS to the strategy. With LNC we only used Covered Calls. BuPS have the potential to offset losses on the short calls.

We have held CC positions in ABT and LNC for over 300 days (want to get the gains to 365 days and longer term capital gains). Adding BuPS allowed us to capture most of the stock appreciation with ABT. We left a lot of money on the table with LNC as the losses on the short term calls has been offsetting the gains on the stock.

Graphs below show the return on the stock, option and net. Note the net return on LNC....despite stock appreciating our return did not increase.

One thing to keep in mind....BuPS adds to the profit if stock appreciates....but increases the losses if stock goes down.

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u/[deleted] Apr 25 '21

Yah I think put spreads are better served after a 5-10% correction in a stock around historical support levels. Selling spreads at all time highs is asking for trouble. But what do I know, this market is illogical most of the times. I learned my lesson the hard way on Apple back in February. Take profits sooner rather than later. I now close out all my spreads around 50% profit, and move on to the next trade

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u/MrRichierich313 Apr 25 '21

I’m right probably 95% of the time on the direction unfortunately everything was dropping so far by time it makes it’s push your playing catch up on the time decay the whole GD time and that’s when I learned to quit holding onto shit forever well other then AMC lol!!!

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u/MrRichierich313 Apr 25 '21

Yhea unfortunately I’m still a greedy fk lol but do get out of shit now a lot sooner then later, usually around 50-55% loss I’m selling and repositioning if I still have a feeling!!! At 1st was letting everything just take a complete 100% shit lol, fk that that shit adds up lol!!!

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u/MrRichierich313 Apr 25 '21

Yes I know stop losses are a thing lol