Changing strategy for options?

Looking at how the market has run this year, I am sitting on new positions that are up over 30% this year. That is huge, and reminiscent of the huge valuation spikes from previous bull market.
I am only pondering this because I “feel” it is too soon for a solid rally, and I expect/plan for some kind of pull back. This is too frothy for me to believe in.
Many of those new positions have plenty of shares to sell some covered calls without selling the whole position. As of this morning, I have a few covered calls on SHOP, ETSY, SOFI, and RKLB. These are mostly aimed at being like the opposite of a stop loss? Meaning, I’ve been considering pulling profit money off the table. The issue is that I really don’t have a place to put that cash, as pretty much everything I have is on a tear the last few months.

If called away, I will get the premium, and I’ll just put that money into something steady or just keep cash for now.
If not called away, I will get the gain and the premium and will then throw out some more options if premiums look ok.

Not sure if this makes sense, but it seems to work as a plan in my head.

1 Like

What would you consider as “something steady” in this case?

Getting back here, I found out why my reply was not getting approved. Seems there are perfectly fine investing ideas that are completely verboten on the actual discussion boards.

So…stocks I would see as ‘safe’ to me are ones like BEP (a renewable energy conglomerate that is paying a good dividend), and some funds that I have been tracking for a long time. I can put money into those, so it isn’t just cash and reap the slow gains over time.)

Follow up to the first post, I closed the SHOP covered call today for >84% of the premium. Figured better to take it off the table for now, see where the week goes.

1 Like

Rolling out my SOFI covered call for the same reasons. The other’s that are left will expire, but it was very close for a bit. I didn’t panic because I had a plan and was fine if they got called.

Just going to have to put some of my rebalancing off till after earnings.

1 Like