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.🥇 Part 1: My Gold Wheel Strategy — Selling Cash-Secured Puts and Covered Calls on Gold🐶 My Options Puppy Approach to Gold🐶 I have always liked the idea of using options not only to speculate, but als...
Apple’s touch-screen and OLED MacBook Pro has one more thing: they are lighter — Significantly lighter. Apple has reengineered the machine’s interior, miniaturizing parts and rearranging components to make the computer much easier to carry.
Source: Mark Gurman
Certain tickers are indeed suitable for Covered Call strategies, which can enhance the performance of your stock holdings. To evaluate the long-term benefits of Covered Calls, we have expanded our backtesting to include more tickers and plotted their cumulative returns and annualized Sharpe ratios in the chart below.
Each ticker has its own unique symbol on the chart. Solid symbols represent a strategy of holding the underlying stock while continuously selling covered calls, whereas hollow symbols represent a simple buy-and-hold strategy.Holding Period: Oct 2022 – Oct 2026 (4 years total)Out-of-the-Money (OTM) Strike: 9% premiumDTE = 2 weeks (strictly Friday expirations)Backtesting over the four-year period reveals that most solid symbols cluster in the bottom-left quadrant, indicating lower Sharpe ratios and lower cumulative returns.Ideally, we would want to identify a strategy that shifts the solid symbols toward the top-right corner, representing both high Sharpe ratios and high returns.In fact, three tickers proved highly suitable for Covered Calls over the past four years:- **TSMC ($Taiwan Semiconductor(TSM.US))**: Executing Covered Calls yielded higher cumulative returns and a significantly improved Sharpe ratio.- **Apple ($Apple(AAPL.US))**: While Covered Calls did not generate higher cumulative returns than holding the stock alone, they did improve the Sharpe ratio.- **Amazon ($Amazon(AMZN.US))**: Covered Calls slightly boosted the Sharpe ratio.- **Meta ($Meta Platforms(META.US))**: Cumulative returns decreased, but the Sharpe ratio increased.Out of the 12 tickers analyzed, data from the past four years highlights three specific stocks that benefit from Covered Call strategies. This approach requires no technical analysis or subjective judgment; it is a mechanical execution of selling two-week-to-expiration covered calls every other week. Simply following this routine can enhance the Sharpe ratio for select individual stocks.Therefore, based on statistical data, it is inaccurate to claim that Covered Calls are entirely ineffective. However, the actual impact varies significantly depending on the individual stock.For holdings in the portfolio, does implementing Covered Calls over the long term actually enhance returns?
Opinions on this question vary. I conducted a small backtest during the holiday period, covering the date range: 2023-01-03 to 2026-10-02.Days to Expiration (DTE): 2 weeks.Strike price set at 9% OTM.Using the US Magnificent Seven tech stocks as an example, the backtest results show that only NVDA and AMZN slightly outperformed long-only stock holding; for the other stocks, buying and holding without writing covered calls yielded better returns.This result may surprise many. However, it's understandable that people have the illusion that selling options is easy money, because selling out-of-the-money options, especially those 9% OTM, are inherently high-probability strategies.Unfortunately, historical data suggests that if the underlying asset is one of the Magnificent Seven tech stocks that have surged significantly in recent years, Covered Calls tend to be high-probability but negative expected value strategies.$Apple(AAPL.US), $Microsoft(MSFT.US), $Alphabet - C(GOOG.US), $Amazon(AMZN.US), $Meta Platforms(META.US), $NVIDIA(NVDA.US), $Tesla(TSLA.US)$Ps S&P 500 Mmtm(SPMO.US)
Context: US stocks turned higher on Thursday in choppy trade, with the S&P 500 falling early to a two-week low but then rebounding sharply as a global bond selloff reversed course after sending US Treasury yields to multi-decade highs. Stocks were under pressure in early trading as economic data kept pointing to a solid economy with persistent price pressures. The Labor Department said weekly initial jobless claims dipped to 197,000, below the 200,000 forecast of economists polled by Reuters. It was the latest in a string of reports this week that indicated the labor market was on solid footing, ahead of the government payrolls report on Friday.
My Trade: The SPMO in particular has been up around 28% this year, and I see little potential for any more significant gains for the year. My target is to accumulate and DCA when possible under $150.
Takeaway: The recent reallocation of holdings in SPMO saw the removal of Broadcom and Nvidia from top 10 holdings, with strong momentum over the past 6 months having Apple now being the 2nd largest holding behind Micron. @Captain's Treasure
The bond market and stock market are sending starkly different signals, creating a dynamic environment for retail investors.
1. The Two-Speed Bond Market 🛣️
A softer August PCE inflation report hasn't stopped a major split in Treasury yields:
* Short-Term Bonds: Prices are rising (yielding under 4.87% on 2-year Treasuries) as traders lower the probability of near-term Fed rate hikes.
* Long-Term Bonds: Prices are falling (pushing 10-year yields over 5.27% and 30-year yields past 5.6%) as investors demand a higher term premium.
3 Reasons Long-Term Yields Stay High ⭐
* War-Driven Energy Costs: Brent crude topping $103/barrel keeps long-term inflation fears alive.
* Heavy Treasury Supply: Funding a ~$40T national deficit floods the market with new debt, pushing yields up to attract buyers.
* AI Debt Competition: Tech firms are issuing debt to build AI infrastructure, competing directly for global capital.
2. Why Big Tech Resists High Rates ⁉️
Unlike the rate-driven tech selloff of 2022, megacap giants (Microsoft, Meta, Nvidia, Apple) are holding up the broader market due to core structural strengths:
* 💰 Cash Havens & Net Interest Earners: With massive cash reserves exceeding total debt, giants like Apple and Microsoft actually earn higher yields on their corporate cash piles without relying on high-cost borrowing (according to Baron).
* 🤑 Extreme Profitability & AI CapEx: Driven by generative AI infrastructure demands, expected S&P 500 earnings growth sits near 32%—led heavily by chipmakers and hyperscalers with active, immediate monetization.
🤔 Investor Takeaway:
While high yields pressure traditional growth stocks and long-term bond funds, Big Tech today functions with structural strength. Expect divergence between self-funding megacaps and debt-heavy small-cap companies (especially those fueled on narrative rather than real earnings).
This Thursday, I’m launching the Power On Podcast and it’s all about Apple and consumer tech. It’ll be available anywhere you can get your podcasts, including on Apple and Spotify. It’ll also be a video podcast on YouTube and Bloomberg’s website. Enjoy!
Source: Mark Gurman
Meta Muse is on hot topic this week, gaining lots of popularity whereas apple still lagging in AI implementation. Apple new CEO should have asked Muse for some good recommendations.
Fed's Williams saw "no need for urgency" on the next hike, cutting October odds to a coin flip ahead of tonight's PCE. Then Micron reports before dawn Thursday, with Street targets from $1,100 to $2,0...
