My 2018 primer, Selling Options...Simply Called and Simply Put, targets 3 groups: investors that are new to option trading, Series 7 exam students, and stockbrokers who passed Series 7 but lack good understanding of option trading (for 8 years, I was one of them). But this blog is helpful to investors and stockbrokers with all levels of option trading experience. My posts offer a pithy, first person style that I have used since 1995 to lessen their option trading angst.
Wednesday, August 29, 2018
Should I have sold Fidelity Contrafund to "sell puts, then calls?"
On 8/17/17, upon retiring from Fidelity Investments, I sold $376K of my Fidelity Contrafund (which I had built over 10+ years) & directly rolled over that amount from my 401K into my IRA. With this $376K, I sold puts against 4 ETFs, & if I was forced to buy an ETF, I sold calls against it. Every month, consistently. My target allocation was 40% SPY (S&P 500), 15% EFA (developed-int'l), 10% EEM (emerging-int'l) & 35% TLT (US Treasurys). I added $14K to this $376K over the next year, & on 8/20/18, my option selling strategy was valued at $402K. The $12K increase amounted to a 3.03% return. On 8/20/18, my allocation was skewed to 28% SPY, 18% EFA, 18% EEM & 36% TLT. Had I kept my $376K in Fidelity Contrafund on 8/17/17, on 8/20/18 it would have been worth $467K, returning 24.2%. Did I make a mistake? I'd love to hear my readers' comments.
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