The best thing to do in a declining market such as we are currently experiencing, is to maintain your asset allocation, whatever it is. 50/50 is good, as is 60/40 or 55/45 – the ratio is not important as long as it has a significant part in cash or near cash.
This will result in buying more bargains as the market drops or cashing in profits as the market rises. The shorter the expiration date, the greater the percentage of premium income.
SPY is an exchange-traded fund that tracks the S&P 500. It is the best security to use.
With SPY, it is possible to sell covered calls first thing in the morning with the expiration date at the end of the same day.
Yesterday, we sold covered calls on SPY when the market opened with an expiration date at the end of the same day and got
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