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, July and August returning +3.8%, +4.4% and 4.5%, respectively.
We’re going to examine the results of the same strategy for the month of September. We used the same list of “recession proof” stock market symbols as outlined in the previous article. Using PowerOptions new SmartHistoryXL option back testing tool, we analyzed the results of selected positions on August 21, 2006 with all stock options expiring on September 15, 2006 (September stock options expiration). The results are shown below:
| Results for Covered Call search on August 21 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock Sym |
Stock Price 8/21/2006 |
Opt Strike &Mo. |
Opt Sym |
Opt Bid |
%Dnsd Prot. |
%If Assnd |
Stock Price 9/15/2006 |
% Ret. |
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| MCRS | 38.21 | 06 SEP 40 | MFKIH | 0.80 | 2.10 | 6.90 | 50.53 | 6.9 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| UNH | 49.56 | 06 SEP 50 | UHBIJ | 1.25 | 2.50 | 3.50 | 52.21 | 3.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| ERTS | 49.99 | 06 SEP 50 | EZQIJ | 1.65 | 3.30 | 3.40 | 54.22 | 3.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| POT | 98.97 | 06 SEP 100 | POTIT | 2.65 | 2.70 | 3.80 | 95.13 | -1.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
# Successful positions: 3 out of 4 (75%)
Avg. % Return: 3.2%
Analysis
The list of screened stock market symbols is noticeably different from the lists of stock market symbols selected in June, July and August. The recession proof covered call investing strategy for September returned an average of 3.2% (26 days) with a success rate of 75%. Of note, even though the stock price of POT dropped -3.9%, the covered call position returned a loss of only -1.2%, the results of the POT 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]covered call investment strategy, option income, stock options, covered call options, covered call investing, stock market symbols[/tags]