While there are some subscription screening services out there, I'm finding I can create my own opportunities by screening for fundamentally strong stocks that are in uptrends.

Once I make a list of stocks I'd like to own, I check them out at M*'s option service. In snapshots, click on Options. However, I'm a little concerned that M*'s option prices may be a bit out of date. You can compare them for free over at yahoo.finance, or on your broker's web site. 

I have developed a simple calculator to determine the returns on each option for the remaining  life of the contract depending on whether it's called or not. And I can see potential annualized returns, number of contracts, investments and net credit or debit on a trade. What I don't have in my spreadsheet that's in M*'s calculator is a provision for interest rates or dividends. But I do calculate in the commissions, which are a little hard to figure at thinkorswim. If you read a few books on options, you'll see how to put together a spreadsheet and there apparently are some available online.

What screening services are people using to find attractive buy writes, leaps, etc.?
 

Johnson,

I use Value Line Daily Options Survey to scan for covered calls (buy-writes) from a list of M* stocks rated 3-5 Stars. For more info see my blog.

Mike A

Lots of good ideas and a good trading plan, Mike. Recommend your blog to everyone.

I combine fundamental and technical analysis, looking for stocks that clearly are in an uptrend. If a trade goes wrong, I dump it and try something else rather than hope to dollar average my way out of the hole. 

Valueline.com has an 8 week trial for $37.50. I signed up and tested a planned trade. Did covered call trade on MON OCT 07 80. It was ranked a 1, MON common was ranked 1 and Tech was 2. I had originally found the screen on INvestors.com, which is offering its screening tools free for a couple of weeks. Then I looked at the contract on investors.com and M*. In a covered call trade, you buy the underlying stock and sell the same number of calls, 100 shares per call contract.

Liked the trade because the stock is in an uptrend.

Mac profit 4.54%, 57.1% annualized. M* est. annualized was 48% last night. Uncalled annualized 42%; called 56.65%. My spreadsheet may be off a tiny bit.

Stock was down on the day as was the Dow.

Bot stock at $79.09 and sold the calls at $2.65 

Net Debit $76.44/share, which is the breakeven on the trade.

Do you like the trade? 

Took about 35 minutes to fill. The trade hit my limit several times before it filled just before the close. I dithered too long before doing the trade.

I'm down $37.50 on the day on the trade. 

Hi All:

I am new to writing covered calls. I've read (not studied) a few books, including Hooper & Zalinsky's "Covered Calls & Leaps: A Wealth Option." I'm beginning serious study of their methods and have found two tools helpful:

 OptionGrid: A really neat (at least to me) program that allows you to:

   * maintain your (stock & call) portfolio

   * do analysis on options.  I can analyze stocks and calls I'm interested in - based on sources like M*, my broker, and other sources.

 The other is a free program: Option Oracle (available from SamoaSky).

 I've done a test drive of some of the options web sites. As a newbie, they offer more than I can really use at this point and thus, the cost seems out of balance with the potential reward for me at this point. I do like Ivolatility.com's free basic calculator and use it quite often.

I look forward to learning from all of you.

Thanks for the newsy reply.

I've read and re-read Hooper & Zalinsky's "Covered Calls & Leaps: A Wealth Option."

My conclusion is that they've made their system so complicated it's unworkable for most people, and it depends on having you subscribe to their expensive web site. Indeed, didn't you get the feeling that the book is a sales pitch for their service;

Note that the options guru, Lawrence McMillan, concludes that writing covered calls is no more productive than buying stocks outright. He says buying covered calls with limited profit potential and unlimited risk makes little sense compared with buying stocks and managing your losses.

I'm coming back to my original strategies of buying stocks and LEAPs. I have three covered call positions that I put on last week, but I'm ready to bail if they show any signs of going south.