In a previous article, Recession Proof Covered Call Investment Strategy , we outlined a covered call investing strategy focusing on “recession proof” stocks. This strategy exhibited great results for the months of June and July, returning +3.8% and +4.4% respectively. We’re going to examine the results of the same strategy for themonth of August.
We used the same list of “recession proof” stock market symbols as outlined in the previous article. Using PowerOptions new SmartHistoryXL Back Testing tool, we analyzed the results of selected positions on July 24, 2006 with all stock options expiring on August 18, 2006 (August stock options expiration). The results are shown below:
| Results for Covered Call search on July 24, 2006 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Sym. |
Stock Price 24-Jul-06 |
Strike Mo. |
Opt. Sym. |
Opt. Bid |
% Dnsd Prot |
% If Assnd |
Stock Price 18-Aug-06 |
% Ret | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ACO | 21.69 | 06 Aug 22.5 | ACOHX | 0.70 | 3.20 | 7.20 | 23.55 | 7.20 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| POT | 87.59 | 06 Aug 90 | POTHR | 2.15 | 2.50 | 5.30 | 100.04 | 5.30 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| FRX | 44.58 | 06 Aug 45 | FHAHI | 1.10 | 2.50 | 3.50 | 48.07 | 3.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| MCRS | 39.62 | 06 Aug 40 | MFKHH | 1.35 | 3.40 | 4.50 | 39.07 | 2.10 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
# Successful positions: 4 out of 4 (100%)
Avg. % Return: 4.5%
Analysis
The list of screened stock market symbols is noticeably different from the lists of stock market symbols selected in June and July. The recession proof covered call investing strategy for August returned an average of 4.5% (26 days) with a success rate of 100%. Of note, even though the stock price of MCRS dropped -1.4%, the covered call position returned a profit of +2.1%, the results of the MCRS position illustrate why the covered call investment strategy is considered to be a conservative strategy, (see “Aggressive Strategy for the Conservative Investor” for more information).
PowerOptions provides Internet based tools for analyzing stock options with specific search criteria and for finding potentially lucrative option income. For those seeking to execute a covered call investment strategy for their personal portfolios, PowerOptions provides an Internet based search engine for finding potentially lucrative income producing covered call options positions.
[tags]stock options, covered call investing, covered call options, stock market symbols[/tags]