Introduction
Everyone aspires to achieve financial freedom at a young age without having to wait until old age to retire. This idea is embodied in the FIRE (Financial Independence, Retire Early) movement. However, if you rely solely on your salary from work, it is nearly impossible for 99.9999…% of people to become wealthy.
Let’s do a simple mathematical calculation:
-
Assume you start working immediately after college with an after-tax annual salary of $60,000, working from age 22 to 40. Your total earnings would be:
$60000 * 18 = $1.08M
-
If you want to buy a decent house at age 30, with a house priced at $700,000, the total cost after accounting for mortgage interest would be close to $1.4M.
In other words, even if you belong to the top 1% of earners, your entire income from graduation to age 40 would barely be enough to purchase a house, not to mention covering daily expenses, children’s education, retirement, and other living costs.
Thus, relying solely on your salary makes it almost impossible to become truly wealthy.
My Investment Strategy (2025)
Market Situation Analysis
The current market is transitioning between bull and bear phases, as evidenced by the following observations:
- Small-cap stocks are experiencing significant volatility.
- SPY has been range-bound for the past 4 months.
- In the near future, SPY might either retrace to its 200-day moving average or drop by more than 20%.
My Strategy
Sell SPY Daily Covered Call Strategy
While holding SPY, I employ a strategy of selling covered call options daily to generate extra income.
- At market open each day, I sell a covered call option for SPY with a strike price set 0.2% above the opening price.
- Five minutes before the market closes, if SPY is above the strike price, I buy back the option.
Which strike price is best
-
I’d like to choose 0.2% OTM call to sell
- All Days Gain(The Win All Premium Days) <= 0.2% Ratio: 61.51% (154 days)
- 0.2% < All Days Gain(The Win Part Premium Days) <= 0.5% Ratio: 16.65% (42 days)
- All Days Gain(The Lost Days) > 0.5% Ratio: 21.84% (55 days) (Average Lost 0.97 premium per day)
- Lost < 1 day’ premium Ratio: 15.14% (37 days)
- Lost > 1 day’ premium Ratio: 4.32% (9 days)
- Lost > 2 days’ premium Ratio: 2.22% (4 days)
- Lost > 3 days’ premium Ratio: 0.95% (2.38 days)
- Lost > 4 days’ premium Ratio: 0.51% (1.28 days)
- Lost > 5 days’ premium Ratio: 0.33% (0.83 days)
- Extreme market conditions with an average of less than 1 day per year are not counted
- Expect to just one lost day in a week
| Year | Red Days | Green Days | Green Days Large Gain Ratio | All Days Gain > 0.2% Ratio | All Days Gain > 0.5% Ratio | All Days Gain >= 0.2% & < 0.5% Ratio | All Days Gain > 0.5% & < 1% Ratio | All Days Gain >= 1% Ratio | All Days Gain > 1% Ratio | All Days Gain > 1.5% Ratio | All Days Gain > 2% Ratio | All Days Gain > 2.5% Ratio | All Days Gain > 3% Ratio | All Days Gain > 3.5% Ratio |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2015 | 111 | 103 | 0.427184466 | 0.369159 | 0.196262 | 0.172897 | 0.135514 | 0.060748 | 0.060748 | 0.032710 | 0.014019 | 0.004673 | 0.004673 | 0.004673 |
| 2016 | 112 | 140 | 0.342857143 | 0.365079 | 0.178571 | 0.186508 | 0.123016 | 0.055556 | 0.027778 | 0.015873 | 0.003968 | 0.003968 | 0.000000 | 0.000000 |
| 2017 | 112 | 139 | 0.201438849 | 0.290837 | 0.051793 | 0.239044 | 0.051793 | 0.000000 | 0.011952 | 0.003984 | 0.000000 | 0.000000 | 0.000000 | 0.000000 |
| 2018 | 124 | 127 | 0.503937008 | 0.350598 | 0.203187 | 0.147410 | 0.127490 | 0.075697 | 0.131474 | 0.075697 | 0.035857 | 0.019920 | 0.007968 | 0.003984 |
| 2019 | 114 | 138 | 0.456521739 | 0.384921 | 0.174603 | 0.210317 | 0.123016 | 0.051587 | 0.043651 | 0.011905 | 0.003968 | 0.000000 | 0.000000 | 0.000000 |
| 2020 | 106 | 147 | 0.673469388 | 0.450593 | 0.300395 | 0.150198 | 0.185771 | 0.114625 | 0.150198 | 0.090909 | 0.048309 | 0.024155 | 0.009662 | 0.004831 |
| 2021 | 115 | 137 | 0.686131387 | 0.388889 | 0.242063 | 0.146825 | 0.198413 | 0.043651 | 0.071429 | 0.019841 | 0.007937 | 0.003968 | 0.000000 | 0.000000 |
| 2022 | 124 | 127 | 0.881889764 | 0.454183 | 0.354582 | 0.099602 | 0.214570 | 0.211155 | 0.215139 | 0.115538 | 0.063218 | 0.039997 | 0.019998 | 0.007999 |
| 2023 | 103 | 147 | 0.707482993 | 0.440000 | 0.244000 | 0.196000 | 0.189000 | 0.092000 | 0.064000 | 0.024000 | 0.012000 | 0.006000 | 0.002000 | 0.000000 |
| 2024 | 117 | 135 | 0.681481481 | 0.361111 | 0.186508 | 0.174603 | 0.200000 | 0.031746 | 0.059524 | 0.023810 | 0.011905 | 0.005952 | 0.001984 | 0.001984 |
| 2025 | 16 | 21 | 0.714285714 | 0.378378 | 0.270270 | 0.108108 | 0.162162 | 0.000000 | 0.081081 | 0.027027 | 0.013514 | 0.006757 | 0.003378 | 0.000000 |
| Year | 0.5% OTM | 0.2% OTM | ATM | 0.2% ITM | 0.4% ITM | 0.6% ITM |
|---|---|---|---|---|---|---|
| 2015 | 4189.41 | 4806.69 | 5469.76 | 5185.79 | 4647.96 | 4021.70 |
| 2016 | 3537.13 | 4242.37 | 4158.32 | 3894.58 | 2942.11 | 2137.92 |
| 2017 | 1504.14 | 2568.83 | 2848.50 | 1459.74 | 781.24 | -305.49 |
| 2018 | 4064.90 | 4618.99 | 5630.93 | 5143.83 | 5014.71 | 4609.53 |
| 2019 | 6686.38 | 8116.26 | 7949.02 | 6963.93 | 4853.65 | 3273.60 |
| 2020 | 20094.39 | 20402.31 | 19685.14 | 18539.44 | 16814.75 | 15715.47 |
| 2021 | 6312.17 | 6681.14 | 6438.92 | 5065.61 | 3155.37 | 1788.66 |
| 2022 | 11416.37 | 11665.00 | 11973.63 | 12022.79 | 11776.19 | 11357.46 |
| 2023 | 5518.12 | 5186.03 | 4258.43 | 2096.03 | 1007.40 | -813.24 |
| 2024 | 10054.17 | 11877.66 | 12370.57 | 11736.19 | 9048.40 | 6377.49 |
Improvement
- Even in a red day, open price is not usual the highest price of the day. Could set sell calls limit price little above the open one.
- Don’t be panic in a big green day see the statistics of the $SPY daily data of the past 10 years.
2015-2024 Return Analysis
- If init capital is $84000 for 400 shares of SPY
| Year | SPY Opening Price ($) | Beginning Shares | SPY Returns ($) | Covered Call Returns ($) | Total Annual Returns ($) | New Shares Purchased | Next Year’s Shares | SPY Return Rate | Covered Call Return Rate | Total Return Rate |
|---|---|---|---|---|---|---|---|---|---|---|
| 2015 | 210.66 | 400.00 | -2,947.60 | 19,226.76 | 16,279.16 | 95.65 | 495.65 | -3.50% | 22.82% | 19.32% |
| 2016 | 201.02 | 495.65 | 11,445.15 | 16,969.48 | 28,414.63 | 75.38 | 571.03 | 11.50% | 17.05% | 28.55% |
| 2017 | 225.24 | 571.03 | 23,902.95 | 12,844.15 | 36,747.10 | 47.80 | 618.83 | 18.57% | 9.99% | 28.57% |
| 2018 | 268.77 | 618.83 | -11,126.12 | 27,713.94 | 16,587.82 | 110.74 | 729.57 | -6.70% | 16.67% | 9.98% |
| 2019 | 250.18 | 729.57 | 56,331.73 | 56,813.13 | 113,145.55 | 170.44 | 900.01 | 30.38% | 18.50% | 48.88% |
| 2020 | 324.87 | 900.43 | 45,757.66 | 183,479.79 | 229,379.45 | 99.70 | 1,402.36 | 15.56% | 56.54% | 72.11% |
| 2021 | 368.79 | 1,402.36 | 137,315.50 | 93,535.96 | 230,851.46 | 195.70 | 1,598.06 | 26.55% | 18.12% | 44.66% |
| 2022 | 477.71 | 1,598.06 | -150,455.12 | 174,975.06 | 24,519.88 | 459.34 | 2,057.40 | -19.71% | 24.42% | 4.71% |
| 2023 | 380.82 | 2,057.40 | 185,205.86 | 103,720.60 | 288,926.46 | 219.46 | 2,276.86 | 23.66% | 13.62% | 37.28% |
| 2024 | 472.65 | 2,276.86 | 259,525.04 | 261,308.52 | 520,833.56 | - | - | 24.13% | 25.13% | 49.26% |
| 年份 | SPY 起始价 | 年初持仓 (股) | SPY 收益 (USD) | Covered Call 收益 (USD) | 年总收益 (USD) | 新买入股数 (股) | 次年持仓 (股) |
|---|---|---|---|---|---|---|---|
| 2015 | 210.66 | 400.00 | –2,947.60 | 19,226.76 | 16,279.16 | 95.65 | 400 + 95.65 = 495.65 |
| 2016 | 201.02 | 495.65 | 11,445.15 | 16,969.48 | 28,414.63 | 16,969.48 ÷ 225.24 ≈ 75.38 | 495.65 + 75.38 = 571.03 |
| 2017 | 225.24 | 571.03 | 23,902.95 | 12,844.15 | 36,747.10 | 12,844.15 ÷ 268.77 ≈ 47.80 | 571.03 + 47.80 = 618.83 |
| 2018 | 268.77 | 618.83 | –11,126.12 | 27,713.94 | 16,587.82 | 27,713.94 ÷ 250.18 ≈ 110.74 | 618.83 + 110.74 = 729.57 |
| 2019 | 250.18 | 729.57 | 56,331.73 | 56,813.82 | 113,145.55 | 56,813.82 ÷ 324.87 ≈ 174.80 | 729.57 + 174.80 = 904.37 |
| 2020 | 324.87 | 904.37 | 45,757.66 | 183,620.79 | 229,378.45 | 183,620.79 ÷ 368.79 ≈ 497.99 | 904.37 + 497.99 = 1,402.36 |
| 2021 | 368.79 | 1,402.36 | 137,315.50 | 93,535.96 | 230,851.46 | 93,535.96 ÷ 477.71 ≈ 195.70 | 1,402.36 + 195.70 = 1,598.06 |
| 2022 | 477.71 | 1,598.06 | –150,455.12 | 174,975.00 | 24,519.88 | 174,975.00 ÷ 380.82 ≈ 459.34 | 1,598.06 + 459.34 = 2,057.40 |
| 2023 | 380.82 | 2,057.40 | 185,205.86 | 103,720.60 | 288,926.46 | 103,720.60 ÷ 472.65 ≈ 219.46 | 2,057.40 + 219.46 = 2,276.86 |
| 2024 | 472.65 | 2,276.86 | 259,525.04 | 261,308.52 | 520,833.56 | — | 2,276.86 (期末资产) |
- If init capital is $84000 and add $30000 each year at start
| 年份 | SPY 起始价 (USD) | 注资股数 = 30k/起始价 (股) | 年初持仓 (股) | SPY 收益 per 100 股 (USD) | Covered Call 收益 per 100 股 (USD) | SPY 收益 (USD) | Covered Call 收益 (USD) | 年总收益 (USD) | 新买入股数 = (Covered Call收益)/(下年起始价) (股) | 年末持仓 (股) | 次年年初持仓 (股) |
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2015 | 210.66 | 30,000/210.66 ≈ 142.32 | 400 + 142.32 = 542.32 | –2,947.60 | 19,226.76 | 542.32/100 × (–2,947.60) ≈ –15,999.2 | floor(542.32/100)=5 × 19,226.76 = 96,133.8 | 80,134.6 | 96,133.8/201.02 ≈ 477.94 | 542.32 + 477.94 = 1,020.26 | 1,020.26 + (30k/201.02=149.0) = 1,169.26 |
| 2016 | 201.02 | 30,000/201.02 ≈ 149.00 | 1,169.26 | 2,310.08 | 4,242.37 | 1,169.26/100 × 2,310.08 ≈ 26,989.0 | floor(1,169.26/100)=11 × 4,242.37 = 46,666.1 | 26,989.0 + 46,666.1 = 73,655.1 | 46,666.1/225.24 ≈ 207.15 | 1,169.26 + 207.15 = 1,376.41 | 1,376.41 + (30k/225.24=133.14) = 1,509.55 |
| 2017 | 225.24 | 30,000/225.24 ≈ 133.14 | 1,509.55 | 4,185.72 | 2,568.83 | 1,509.55/100 × 4,185.72 ≈ 63,164.9 | floor(1,509.55/100)=15 × 2,568.83 = 38,532.5 | 63,164.9 + 38,532.5 = 101,697.4 | 38,532.5/268.77 ≈ 143.37 | 1,509.55 + 143.37 = 1,652.92 | 1,652.92 + (30k/268.77=111.54) = 1,764.46 |
| 2018 | 268.77 | 30,000/268.77 ≈ 111.54 | 1,764.46 | –1,798.22 | 4,618.99 | 1,764.46/100 × (–1,798.22) ≈ –31,736.6 | floor(1,764.46/100)=17 × 4,618.99 = 78,522.8 | –31,736.6 + 78,522.8 = 46,786.2 | 78,522.8/250.18 ≈ 313.99 | 1,764.46 + 313.99 = 2,078.45 | 2,078.45 + (30k/250.18=119.95) = 2,198.40 |
| 2019 | 250.18 | 30,000/250.18 ≈ 119.95 | 2,198.40 | 7,717.56 | 8,116.26 | 2,198.40/100 × 7,717.56 ≈ 169,567.7 | floor(2,198.40/100)=21 × 8,116.26 = 170,441.5 | 169,567.7 + 170,441.5 = 340,009.2 | 170,441.5/324.87 ≈ 524.38 | 2,198.40 + 524.38 = 2,722.78 | 2,722.78 + (30k/324.87=92.36) = 2,815.14 |
| 2020 | 324.87 | 30,000/324.87 ≈ 92.36 | 2,815.14 | 5,054.69 | 20,402.31 | 2,815.14/100 × 5,054.69 ≈ 142,324.4 | floor(2,815.14/100)=28 × 20,402.31 = 571,264.7 | 142,324.4 + 571,264.7 = 713,589.1 | 571,264.7/368.79 ≈ 1,548.22 | 2,815.14 + 1,548.22 = 4,363.36 | 4,363.36 + (30k/368.79=81.34) = 4,444.70 |
| 2021 | 368.79 | 30,000/368.79 ≈ 81.34 | 4,444.70 | 9,791.88 | 6,681.14 | 4,444.70/100 × 9,791.88 ≈ 435,416.3 | floor(4,444.70/100)=44 × 6,681.14 = 293,970.2 | 435,416.3 + 293,970.2 = 729,386.5 | 293,970.2/477.71 ≈ 615.13 | 4,444.70 + 615.13 = 5,059.83 | 5,059.83 + (30k/477.71=62.81) = 5,122.64 |
| 2022 | 477.71 | 30,000/477.71 ≈ 62.81 | 5,122.64 | –9,414.79 | 11,665.00 | 5,122.64/100 × (–9,414.79) ≈ –482,674.6 | floor(5,122.64/100)=51 × 11,665.00 = 594,415.0 | –482,674.6 + 594,415.0 = 111,740.4 | 594,415.0/380.82 ≈ 1,560.00 | 5,122.64 + 1,560.00 = 6,682.64 | 6,682.64 + (30k/380.82=78.71) = 6,761.35 |
| 2023 | 380.82 | 30,000/380.82 ≈ 78.71 | 6,761.35 | 9,010.01 | 5,186.03 | 6,761.35/100 × 9,010.01 ≈ 609,575.3 | floor(6,761.35/100)=67 × 5,186.03 = 347,663.0 | 609,575.3 + 347,663.0 = 957,238.3 | 347,663.0/472.65 ≈ 735.81 | 6,761.35 + 735.81 = 7,497.16 | 7,497.16 + (30k/472.65=63.44) = 7,560.60 |
| 2024 | 472.65 | 30,000/472.65 ≈ 63.44 | 7,560.60 | 11,403.82 | 11,877.66 | 7,560.60/100 × 11,403.82 ≈ 861,309.8 | floor(7,560.60/100)=75 × 11,877.66 = 890,823.0 | 861,309.8 + 890,823.0 = 1,752,132.8 | – （最终年不再再投） | — | — |
