Personal Finance and Investing

3Hotdogs

(14,472 posts) Mon Jun 23, 2025, 11:11 PM Jun 23

Selling covered calls. I am interested in selling covered calls for the Russell 2000.

It will cost about 250k for a share in the fund. I would sell the calls that expire every two days, two or three times per week.

The fund is not exceptionally volatile. Which is why I choose this. A 10 point gain on 100 shares would result in a gain of $1,000. I would sell calls that are 5 or 10 points out. If they are "called," I would buy to close so as to not pay a tax on the profit. I would make less money than if the option is not called.

If the fund declines in value, which it certainly will at some point, I will sell the next expiration date but at a lower strike price, with the intention of keeping the shares.

Thoughts?

6 replies

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Selling covered calls. I am interested in selling covered calls for the Russell 2000. (Original Post) 3Hotdogs Jun 23 OP

You said a single share in the "fund" is $250K A HERETIC I AM Jun 25 #1

Symbol is RUT. Google Russe3ll 2000 option chain. 3Hotdogs Jun 25 #2

OK, we were talking past each other. A HERETIC I AM Jun 26 #3

I used the term, fund, rather than index, in the hope of getting more people to respond. 3Hotdogs Jun 26 #4

. truddy777 Wednesday #5

Thx. I have been rethinking this. Maybe better with S & P covered calls. 3Hotdogs Wednesday #6

A HERETIC I AM

(24,820 posts)

1. You said a single share in the "fund" is $250K

Reply to 3Hotdogs (Original post)

Wed Jun 25, 2025, 09:45 AM

Jun 25

What is the ticker of this fund?

$250,000 seems like a significant amount to tie up in one security unless your portfolio is large.

3Hotdogs

(14,472 posts)

2. Symbol is RUT. Google Russe3ll 2000 option chain.

Reply to A HERETIC I AM (Reply #1)

Wed Jun 25, 2025, 05:33 PM

Jun 25

It is an accumulation of 2000 small cap stocks. Similar in style to the S & P 500.

A HERETIC I AM

(24,820 posts)

3. OK, we were talking past each other.

Reply to 3Hotdogs (Reply #2)

Thu Jun 26, 2025, 12:59 AM

Jun 26

I am well aware what the Russell 2000 is. It's an index. As you point out, like the S&P 500.

But you used the word "Fund" which indicated to me you were trading an exchange traded fund, not an option chain on the index itself. That’s why I asked what the ticker was.

Best of luck and may all your trades be net gains.

3Hotdogs

(14,472 posts)

4. I used the term, fund, rather than index, in the hope of getting more people to respond.

Reply to A HERETIC I AM (Reply #3)

Thu Jun 26, 2025, 07:56 AM

Jun 26

truddy777

(41 posts)

5. .

Reply to 3Hotdogs (Original post)

Wed Aug 27, 2025, 09:31 AM

Wednesday

Selling short-dated calls on something not too volatile usually means steady premiums without crazy swings. Only thing I’d watch is the buy-to-close part - you might eat into your gains if you’re closing too often. Some folks are fine just letting shares get called and then rebuying if they still like the fund.

3Hotdogs

(14,472 posts)

6. Thx. I have been rethinking this. Maybe better with S & P covered calls.

Reply to truddy777 (Reply #5)

Wed Aug 27, 2025, 11:30 PM

Wednesday

Selling 2 to 3 days out, at about 3 points out, I shouldn't get called out too often. Tax wise, I think would be better to buy to close than to get called out and rebuy.

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