February Option Investing – EDC Covered Calls

I decided to keep my small position in EDC and use it for a training experiment. I need to focus on generating cashflow, not a fluctuating account balance. Given the fact that EDC is a small position in my portfolio, a drop of 50% in the price of EDC would still not cause much damage overall (my ego, that’s another story).

So I am going to see what the effects are when selling covered calls on a position in a downtrend. If I am truly going to live off paper income, there will be times when I am watching my balance or my position size shrink, and both will have a negative impact on the amount of paper income created per month.

For the record, I sold March 2011 Calls at a $35.00 strike price on Monday.

Gross Cashflow: ~$493 USD

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About T. Knight
Blogging about my journey to financial independence via investing for cashflow.

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