I didn't need to make many portfolio changes this week. My covered calls on FXI and GDX expired unexercised. I renewed my covered calls on FXI to expire next month. With GDX, I sold my calls in my IRA to expire this Friday, and in my taxable account I sold them to expire next month.
My intent in splitting the GDX expirations was to capture a larger cash premium in my IRA with a lower strike price that is much closer to the current market price of GDX. I needed a shorter expiration date to minimize the possibility that volatility would spike and sell away the GDX holdings. My GDX holdings' value is below the most recent price I paid to recapture them after they were sold away (thanks to covered calls) some months ago. Part of the challenge of a covered call strategy is maintaining the underlying stocks as a long-term investment while minimizing capital gains from selling them and avoiding capital losses from repurchasing them.
I continue to hold several California muni bonds that will mature next year. I am considering putting some cash into TIPS but I must complete some analysis first. Individual TIPS may not adjust in value quickly enough to keep pace with high inflation, but a TIPS bond fund or ETF may be able to keep up. I'll let you know which vehicle I choose (if any) once I've figure that out.
My intent in splitting the GDX expirations was to capture a larger cash premium in my IRA with a lower strike price that is much closer to the current market price of GDX. I needed a shorter expiration date to minimize the possibility that volatility would spike and sell away the GDX holdings. My GDX holdings' value is below the most recent price I paid to recapture them after they were sold away (thanks to covered calls) some months ago. Part of the challenge of a covered call strategy is maintaining the underlying stocks as a long-term investment while minimizing capital gains from selling them and avoiding capital losses from repurchasing them.
I continue to hold several California muni bonds that will mature next year. I am considering putting some cash into TIPS but I must complete some analysis first. Individual TIPS may not adjust in value quickly enough to keep pace with high inflation, but a TIPS bond fund or ETF may be able to keep up. I'll let you know which vehicle I choose (if any) once I've figure that out.
