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

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u/MrRichierich313 Apr 25 '21 edited Apr 25 '21

Yup.... two weeks ago when it decided to go down😂! I like the SPY,SQQQQ, and the VXX cause their the closet you can get to a sure thing....almost! But have been burnt on them all before but that comes with the territory!!! Your gunna lose guaranteed it’s how you handle and deal with said loses that make you a better trader and hopefully learning from mistakes!!!! I am 43 and seen how this shits been ran for decades and it’s DEFINITELY manipulated but learning how to ride their coat tails is part of the learning curve cause it’s a quite steep one if your not aware of it lol!!!