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URL:  https://boards.fool.com/fixed-income-provides-very-limited-returns-but-34763275.aspx

Subject:  Re: safe cash secured puts for income Date:  2/25/2021  6:15 PM
Author:  JoKingMe Number:  11318 of 11335

Fixed income provides very limited returns, but they are getting better.

Still, I want a bit better that fixed income provides and use B/W on dividend paying stocks to achieve this.

My preference is to use dividend paying stocks that I can purchase at/below their 200 DMA and sell JOTM CC's out 1 month or so. Hope to collect dividends with some upside and will roll out/up to capture dividend and maintain upside bias.

Total limit is 12% of total portfolio (B/W 8.5%, Naked PUTs 1.1% ,fixed income securities 2.1%).
Position sizes limited to 1% of total portfolio. Most positions are much smaller than 1%
Have multiple small positions in the same stock (total < 1%) with weekly expirations.
Will do this with stocks that I also hold for long term.
Goal is 12% income from options and dividend with some upside as the bonus.

Been doing this for almost a year averaging 20% annualized return. Beats fixed income by a lot.

I love free commissions!!! Free commissions limit the transaction friction to allow this type of strategy to work. My returns would be significantly lower if I was paying $7 per trade.

John
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