Very interesting thread! Thanks @Gojuryu!
This topic of selling options (both puts and calls) has been consuming me for some time now, so here are some of my ideas.
First of all, like the majority on this forum I’m a buy and hold for the long term investor. I was also considering using the VT ETF at first, but then came to the conclusion that a combination of VTI+VEA+VWO (50%, 40%, 10% respectively) has more advantages. One of it would be that, in case one has a significant amount to invest (say anything higher than $10k), instead of going for the DCA or VCA one can employ a different strategy adding short put options to the mix. So, in this scenario, my idea is to sell 1 VEA Jun19’20 40 PUT @ 0.50 and collect a total of $50 (total cash after tranzaction: $10’050). If the price at maturity will be higher then 40 for VEA, then the option expires worthless and one gets to keep the premium (total cash on 19 Jun 2020: $10’050). However if the price at maturity will be less then 40 for VEA, then one will have bought 100 VEA shares for $4k (total cash on 19 Jun 2020: $6’050). In this ITM scenario, and assuming there’s a correlation between VEA and VTI/VWO share prices, at maturity the prices of VTI/VWO would have dropped too (say a second wave o covid-19 is confirmed and new lock-downs imposed) so one can use the remaining cash (i.e. $6’050) to buy the corresponding VTI/VWO shares much cheaper then what would have paid if going all in now. Of course the downside of this strategy is if the prices keep going up no mater what then one would lose the opportunity for buying cheaper now (in this case, better go all in now and don’t complicate your life).
The other idea I had, with regards to selling calls, i posted it some time ago here. And to expand on it a bit, I think it could work as a strategy for re-balancing the VTI+VEA+VWO portfolio.
Super keen on hearing what you guys think about it.