The Tackle 25 is Tackle Trading’s list of fundamentally strong stocks with liquid options to generate monthly cash flow. It’s a list that we use to sell naked puts to enter into positions for long term investing that we generate cash flow by selling covered calls. I ran the numbers on the list as of April 15th. We always calculate two numbers: the growth of the stock, and the cash flow expectation (CFE), which is the cash flow received from selling call options on the stock itself.  I will be doing another update in May after earnings season.

Below is some interesting data:

1) The SPY (the market) is up a total of 2%.

2) Mutual funds (not including fees) are around 0%.

3) Best performing stock on the list (including CFE) is HBI at 21%.

4) Worst performing stock is CDE at a -14% but with CFE it is a 1% growth.

5) Total ROI on growth equals 32.4% (including draw down).

6) Total ROI on call options sold equals 202.5% with an average total ROI over 3 months of calls sold equaling 8.1% monthly.

7) Only 6 of the Tackle 25 had negative returns with the combination of the growth and covered call: UTX -1.6% ALK -3.1% GG -1% DUK -1.8 SO -5% T -0.8%

Lessons Learned

1) Always rent your stocks out as you’ll make more money on the covered call then you will on the growth of the stock.

2) Get in the game with the Pros at Tackle Trading.

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