Covered Calls and Cash Secured Puts (Part 41)

I am winding up this blog series with concerns about Systematic Covered Writing (SysCW) as a viable trading system.

Directly or indirectly, Rich MacDuff often refers to SysCW as a “money machine.” When you order his book Systematic Covered Writing (2011), he offers a free one-month trial to his service. I maintained a collection of “catch phrases” from his e-mails:

> It always boils down to the math… since November 18th, this CLF
> investment has generated cash at 60.43% when annualized… what if
> we end the year with only half that return… would it really
> matter what the stock is trading for at the time?

> We know that we will not go broke establishing positions that generate
> cash at an annualized rate 52.61%, which is exactly what we did. Wahoo.

> We will be playing this bad boy again!

> Some returns are ridiculous!… I hope you don’t blame me…

> This will be a one word commentary …SWEET!

> …we elected to allow an ‘interim call’ to be exercised because there is
> nothing wrong with a position that ends with an annualized gain of 70.80%.
> (Duh!) … It was not a hard decision to make.

> We are being paid for owning stock even though we were ‘wrong’ at the time
> of purchase. It’s all good. Kind of like the Seahawks! (I spend the bulk
> of my adult life in the Seattle area … what fun!)

> Such is the nature of the Weekly Strategy. We have to trade more often,
> but we are rewarded with more control and more cash. Got to love it.

> …options all expire this Friday. This means we will have an opportunity
> next Monday to either write calls against stock that is assigned, or
> establish new csp positions. Over and over … we generate cash.

Take a good look at the underlying tone here. I will continue discussion on this matter in my next post.