Last week was a tough week for my covered call positions. Price decline in many of the stocks exceeded the protection offered by the call premiums. Over the past two weeks I would have been far better off with some “collars” (use call option premium to purchase an OTM Put option to establish a floor on potential losses) to protect on the downside. Collars would prevented the loss of tens of thousands of dollars on DXCM, PTON, SDC across my accounts. I have used collars before…..and like most people it seemed like I was wasting my money on the “insurance”. When the stocks didn’t drop it felt like you just gave away the money…..but I would have gotten everything back in last few days.
YTD the IB account is outperforming the S&P by 50%. Good result…but it look much better at the end of Sep than Oct.
Hope the election results are conclusive one way or the other and we see more stability by the end of the week.