I caught a break from work and I decided to create a new app for finding optimum covered calls. After writing this post about AI confirming my bias on covered calls on IWM, I decided I should have an app that specializes in finding covered calls for me on the equities AI says are the best for covered calls.
I’ve recently been trading covered calls on XLE, XLP, IWM and TLT and I’m making a ton of cash! I made $2000 in one week recently! The issue is that it was time consuming to find the best optimized trades so I realized I needed to get AI to whip out an app for me!
The app literally took minutes now because I uploaded a sample output file from my other apps and told AI to just copy the format but optimize for covered calls instead of base ratio puts or collars.
I am so excited that I wanted to share on this blog!
When trading covered calls, you have to determine if you want to sell way out of the money calls so that you earn premium but hopefully don’t get assigned or you sell lower call strikes so that you do get assigned and revert back to cash to invest in something else.
The screen shot above shows the dashboard for covered calls on TLT. TLT is an ETF that tracks 20 year government bonds, it pays a dividend of about 4.4% right now. By selling calls on TLT, you can bump that annualized return up a few extra percentage points to include the dividend. Note that the annualized returns on the dashboard DO NOT INCLUDE the dividend!
The sliders on top give me the flexibility of picking calls that may or may not get assigned but it’s all probability based on the options data so nothing is guaranteed. I can also choose the level of profit. AI automatically colors the best trades green and then I pick the ones (in yellow) that I plan on executing the following trading day.
Warning Tax Notice
I would not recommend doing covered calls on TLT inside a taxable brokerage account because that could lead to some very high taxes but I do recommend, if you are so inclined, to do them inside a Roth or IRA.
If you have been paying attention to the stock market, you may have noticed software companies getting clobbered. The reason as I mentioned numerous times now is that AI can replicate almost anything out in the market place now. It can build entire software platforms for the cost of $20/month so why pay Microsoft, Google, Oracle or anyone else money to use their apps when you can build your own?
Share The Wealth
Are you building your own personal apps to help make you a better, smarter, richer person yet? What’s holding you back?