Covered Call Writing Strategies for the Enhanced Permanent Portfolio?

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    Has anyone worked out a good covered call strategy to use against the Enhanced Permanent Portfolio? Monthly expirations or longer term? What percentage out of the money to not get exercised too often in GLD, SPY, and TLT? It seems like this done well could be a great cherry added on top of the delicious desert that is the steady returning Enhanced PP. Any ideas you’ve tried or tested?


    One such strategy is run by Frank (@LI) as described here:

    Keep in mind that holding an asset and selling calls against (ie, covered call) is equivalent to selling a Put. Both strategies have the same risk/reward profile (assuming there is enough cash to back the put in case of assignment).

    Looking fwd to other ideas. Given enough interest I may try to backtest a simplified version of this.


    I realy like the LI systems. I try to protect my portfolio sometimes by writing OTM calls or buying OTM puts.

    I sell calls in special circumstances.
    1. Sell call when QQQ is more then 7% away form the 50 day EMA. I have not backtested it, but I win some and loose some. Its a reversion to the mean strategy.

    2. McMillan has a strategy based on Bollinger Bands for topping/bottoming patterns. (Special setup of BB and Standard Deviation).
    Maybe LI could invite McMillan to present it to us. He picked the top of the market in Jan/Feb and the low of the market in March.

    3. Use the IBD indicator of the Big Picture of the market for bying calls or puts. (Market is in an uptrend (buy calls), Market side ways , Market in correction (buy puts)).

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