Selling call options against your shares is an effective way for SMSF's to generate extra income

Michael Gable

Fairmont Equities

Selling call options against your shares is an effective way for SMSF's to generate extra income. We are doing this at the moment with ANZ. When I look at how ANZ is trading, I noticed that the recent top was met with a 3 black crows formation. This is a negative sign and it indicates a top in the share price. We cannot say that the longer term trend is over, but it makes it clear that over the next several weeks at the very least, ANZ should correct back to cheaper levels. The stock will go ex-divided on 9 May for 83c. These levels are an opportunity to write a covered call as we then expect the shares to slide into support at $32.50. If ANZ falls further after it goes ex-div, then you can potentially not only keep the dividend, but also your shares, and the option premium.

Michael Gable
Managing Director
Fairmont Equities

Michael Gable is managing director of Fairmont Equities. We are a small boutique advisory that uniquely combines both fundamental and technical analysis. As a result, our analysis is featured regularly in the finance media such as the Australian...


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