Buy-Writes

Buy-Writes

Did You Know

  • That buying shares and writing options over those shares out performs just owning shares alone?*
  • The wealth effect of the buy-write stragety comes "by writing options and collecting premium income"*

What is a Buy Write Strategy?

The Buy Write is an options investment strategy in which an investor simultaneously 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 commonly 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.*

Buy Shares and Write Covered Options

If you are happy to buy shares, and then write options on those shares, then 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

 

 

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

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Tony Osborn – Director

Kamella - Administration
CMTECH
Website/Software Administrator