ETF Covered Calls

While CNBC pundits are popping champagne and celebrating “the bottom is finally here” the ETF-Cashinator is reporting some sobering news.  The call volume is still very volatile with huge premiums for May expiry on may key ETFs but worse yet are the ETF covered calls for June.  The ETF-Cashinator kicked out 12 pages of voluminous high yield calls for June and they were all over the board.   I can surmise nothing other than we’ll have a large sell off at some point between now and June.   Sell in May and go away may be in the cards and most likely during May expiry.  We may also rally to new highs between now and June!

ETF Covered Calls website is for educational and entertainment purposes only. Any investment activity is not without risk including loss of principal. Neither this website nor its authors assume any responsibility arising from the use or misuse of any information presented in this blog. You are urged to contact a financial adviser before making any investment decisions. Past performance is no indication of future performance.

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April expiry is here!   It’s time to look forward to May and I’m happy to report that the puts show signs of stabilizing but unfortunately, the calls are all over the board.  There’s an old adage that says, “sell in May and go away” and I think that may apply here.   The fact that there is less put action and still a lot of call action may be an indication that the market will be flat over the summer.  Some investors (such as myself) are still waiting to see what type of government meddling is going to be taking place over the next few weeks and months.   Sticking my toe in the pool and I can’t tell if the water is cold or warm!

The uptick rule may go back into effect at some point or it may not.   There may be new regulatory requirements for financial institution or there may not.   Banks may be able to pay back TARP funds or they may not.  If TARP funds are paid back, the government may relinquish control or it may not.   I could go on but I think you get the point, I’m sitting on the sidelines until I get some definitive answers that can be quantitatively measured via formula, logic and equations and not maybe’s.

Here’s the ETF-Cashinator report for May 2009:

ETF Covered Calls website is for educational and entertainment purposes only. Any investment activity is not without risk including loss of principal. Neither this website nor its authors assume any responsibility arising from the use or misuse of any information presented in this blog. You are urged to contact a financial adviser before making any investment decisions. Past performance is no indication of future performance.

© ETFCoveredCalls.com

Next week is April expiry and the ETF-Cashinator kicked out a bunch of ADJUSTED options so I won’t give the report too much credence.  The May 09 options report looks very volatile as there are 9 pages of ETF Covered Calls > 3% return in such a short time window which doesn’t bode well for the market but anything can happen.

ETF Covered Calls website is for educational and entertainment purposes only. Any investment activity is not without risk including loss of principal. Neither this website nor its authors assume any responsibility arising from the use or misuse of any information presented in this blog. You are urged to contact a financial adviser before making any investment decisions. Past performance is no indication of future performance.

© ETFCoveredCalls.com

CNBC has been orgasmic with regards to the Dow breaking 8000 and every pundit on the station is talking about reaching the bottom finally but that’s not what the cold heartless number crunching ETF-Cashinator is telling me.   The ETF-Cashinator is showing growing premium volatility which means the markets will snap, seize and jerk up or down violently at some point(s) in the future.   I was hopeful that the options puts/calls were stabilizing for May but that seems to be out the window now.   April looks sporadic with 5 pages of ETF Covered Calls thrown out with only a few weeks till April expiry doesn’t bode well for the markets.   Good luck and happy hunting.

ETF Covered Calls website is for educational and entertainment purposes only. Any investment activity is not without risk including loss of principal. Neither this website nor its authors assume any responsibility arising from the use or misuse of any information presented in this blog. You are urged to contact a financial adviser before making any investment decisions. Past performance is no indication of future performance.

© ETFCoveredCalls.com