Larry Berman CFA, CMT, CTAHorizons Gold Yield ETFHGY.TOHOLDAug 08, 2022

One major problem with gold is that it doesn't pay a distribution. Writing covered calls creates that distribution for you. Sometimes the distribution can be too high relative to the options strategy; so they replace that by giving you your own $$ back. He doesn't love that idea. The yield pulls you in, but there's not much advantage on total return.

At 10%, investor is in a good position. But don't add any more.

Nothing wrong with this, but he tends not to write calls on something that's high volatility (like commodities or the Mag 7). Writing calls on something that's volatile severely limits your upside potential, but doesn't protect you that much on the downside. You're not getting much income relative to the risk. Real options traders like this, however, because the premiums on the options are so rich.

What he wants in his covered call strategy are dividend payers, and a more conservative approach.

Covered call on bullion with a nice yield. If you are bullish on the underlying then don’t because you limit your upside. If you think it is range bound then this will enhance your returns. The total return is negative the last year and a half.