I have heard that you can write deep in the money covered calls over long cfd's positions by setting a guaranteed stop loss at the break even point.
Example, Buy XYZ at $105, write deep in the money call at strike of $100 for $7.50 premium. Set guaranteed stop loss at $97.50. If stock stays above 100 you keep premium simple, if stock goes below your long position, it is closed out and then you buy your call back at a cheaper price than you bought it. (Very basic example of course) The strategy risk is then of course your brokerage costs and the differerence between the premium written cost and the the buy back cost. If you get stopped out then you simply look for another opportunity. Basically you have to hope that the stock stays above the strike price and you will make money on the premium.
Before everyone jumps in, yes I have heard that Daniel Kertcher is promoting this strategy and I have seen some other threads regarding this topic. Please lets not turn this thread into slammin him, other threads have already done this.
However, is it possible to actually do this strategy? I have scoured the net and no one has said you can't do it, although no one has confirmed they can. Some say its not worth it as brokerage eats up the premium, others are so busy being negative they haven't even bothered to look into it etc etc.
You can do the strategy through IG Markets however when i called them to ask about it, they said YES you can do the strategy and don't have to go through daniel kertcher, they said the position is cash settled and provided me with all this other info I didn't understand. I can't work out whether the 2 people i spoke to actually understood what i was asking.
Does anyone have any answers at all as the strategy does sound attractive especially if the stock is nicely trending upwards.
Also lets try to keep the thread positive and constructive if possible. Private maessage me if you like. Look forward to hearing replies...