Another question around Short calls

Would like to ask about robust strategy for selling call options in a higly volatile bullish trending Market.




Please call me Mark.

'Robust' is a strong word and I am not sure what you mean.  I am guessing you mean a powerful strategy - one that can make good money.  If that's incorrect please let me know.

In the market you describe, selling naked call options is far too risky.  Thus, you should consider limiting your sales to 'covered' calls.  I recommend that you sell a call option that you find attractively priced, but which is sufficiently out of the money to make you feel comfortable selling it.  Then buy another call option with the same expiration date that is a out of the money by an additional one or two strikes.

For example, AAPL is trading near 140.  If you don't believe this stock will participate fully in the 'volatile, bullish trending market' you can sell the Mar 150 call and purchase an equal number of March 155 or 160 calls.  That LIMITS POTENTIAL LOSSES and allows you to continue to sell calls.  You can earn a very high return on your investment without the risk of selling calls with unlimited losses.

I hope this reply helps you.

Best regards,

Mark D. Wolfinger
The Rookie's Guide to Options:
The Beginner's Handbook of Trading Equity Options