We are still mostly pausing the sale of out of the money puts. We do not like trying to time markets and generally think it is always a good time to sell puts on Dividend Champions (DC). That said, we are now fully invested. We sold a lot of real estate this past year and have a good size tax bill, and our cash is mostly going to Uncle Sam. We don’t see a lot of good news until possibly the November election. Right now we are not selling puts except when:
we have an 800 point decline in the Dow over two consecutive days
on that occasion we will only sell one contract on each DC that is down substantially
the strike price must be at least 15% below the market price at the time of selling the put and no more that three months into the future
we will limit potential margin debt to 10% of our total equity
This is a very conservative posture for us, but we think the environment warrants caution. We will let you know when our strategy changes. Incidentally, we continue to DRIP all our DC dividends and they grow every month no matter where the market values go.
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