Dividends , The Wheel --Cash secured Puts and Covered Call writting

[leftovers]

I always start by shorting cash secured puts. I only use underlying dividend paying securities I would be very happy to own. My goal is preferably to sell the premium and buy it back at 80-90% Profit and never take assignment. 80% of the time it works.

The other 20% I end up getting assigned then I turn around and sell Calls. I work with about 130K and usually hold 4-5 positions a week. I never use more than 50% of my cash so I have wiggle room to make adjustments. I do roll out to the following week sometimes if I can increase my premium received.

Besides the blue chip stocks I use I also have 1 or 2 ETF positions of the indexes, UPRO TQQQ UDOW are the ones I focus on because of the high amount of premium they offer. They can also go the wrong way in a jiffy so I watch those a little more closely and try to sell premium on the down days.

Last year I made 30% this year a little past half way I am at 15%. The wheel works for me but I would not recommend you do it unless you use ONLY stocks you would be happy to own through think and thin.

--cheers