Own Shares

Own Shares

Did You Know?

  • If you already own shares then arguably your risk does not change if you write an option over those shares.

  • If you are concerned that you will be exercised (and may not wish to because of capital gains etc) you could "roll" the option forward into a new contract and your shares are not sold.

  • 80% of options are not exercised

What is a Buy Write Strategy?

The Buy Write is an options investment strategy in which an investor buys shares and writes a call option contract over an equivalent number of shares.  If the shares are already held from a previous purchase, it is often referred to as covered call writing.  Buy-Write is the most basic and widely used options investment strategy, combining the flexibility of listed options with share ownership

Suitable for SMSFs

The strategy of buying shares and writing options is eligible within Self Managed Superannuation Funds (SMSFs), provided it is allowed for in the Fund’s investment strategy

Many SMSF Hold Property and Shares

History tells us that writing covered calls over shares that you hold out performs just holding shares alone.

If you already own shares then arguably your risk does not change if you write an option over those shares.   Only two outcomes can happen: 

  1. The covered call option contract expires worthless and you retain the shares, or

  2. The contract is exercised and the shares are sold for the price agreed in the contract.

My Covered Calls and ProWriter software shows you which options have the best returns.  Other information in the reports includes:

  • Share price
  • Last option trade
  • Expiry month & date
  • Strike Price
  • ASX Fair Price
  • Contract size
  • Open Interest
  • Non-Exercised Profit [at the money, in the money and out of the money]
  • Exercised Profit [at the money, in the money and out of the money]

The above information is regularly updated in the reports during market hours.  The reports are accessible 24/7The information is used to develop a trading plan showing you the outcomes of every option trade

Why Use My Covered Calls?

My Covered Calls is like having a covered call calculator that has a direct feed of live data from the ASX.  The reports are automatically updated and the % profit calculated and instantly displayed for exercised or not exercised outcomes.  This lets you to easily identify those options with 2.5% or better returns exercised or not-exercised.   See for yourself.

 

 

 

 

ASX Buy-Write Fact Sheet See http://www.asx.com.au/documents/resources/buy_write.pdf

ASX Understanding Option Trading http://www.asx.com.au/documents/resources/UnderstandingOptions.pdf 

 

 

Free Access to Mycc
ToolBox resources

  • 5 Steps to Covered Call Trading
  • FREE Trading Plan Caculator (Download)
  • Covered Calls Tutorial (with Trading Plan)
  • How to Generate More Income from Your SMSF
  • Seven Must Know Rules Before You Trade

Our Team

Tony Osborn – Director

Kamella - Administration
CMTECH
Website/Software Administrator