Why use covered calls
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Covered calls can lower portfolio volatility and increase returns, as shown by studies from the University of Massachusetts and an asset consulting group, which demonstrated superior performance compared to benchmarks. Over 15 years, a buy-write strategy significantly outperformed the Russell 2000 with less volatility, while a 23-year study indicated that covered calls yielded higher annual returns and lower volatility than the S&P 500. For more information, resources like tutorials and newsletters are available at borntosell.com.
Why use covered calls
- 2. • What do covered calls do for you? – Lower portfolio volatility – Increase portfolio returns
- 3. Proof point #1: • 15-year study by Univ of Massachusetts • Sell 1-month covered calls on RUT • Summary: “The cumulative growth of the buy‐write strategy over the 15 years of our study far surpasses that of the Russell 2000, with less volatility.”
- 4. • 15 years of using the strategy
- 5. Proof point #2: • 23-year study by Asset Consulting Group: – BXM: S&P 500 at-the-money buy-writes – BXY: S&P 500 2% out-of-the-money buy-writes • Summary: Both BXM and BXY outperformed the S&P 500 with higher annual returns and lower volatility.
- 6. 23 years of using the strategy:
- 7. Returns for time periods ending 12/31/11
- 8. • For additional reasons to use covered calls, visit: http://www.borntosell.com Free tutorial, free newsletter, free blog, and free trial of covered call screener