Can We Use 2 Standard Deviation Implied Volatility When Portfolio Overwriting? click ↑ 4 FeaturedPortfolio overwriting is a form of covered call writing where share retention, capital preservation and generation of modest cash flow are specified goals. We are looking to generate an additional option premium income stream while retaining the underlying shares. The risk of exercise and sale of our shares will always be present, but we can craft our trades in such a manner that the risk becomes much less than ...

Core Insights - High implied volatility (IV) stocks and ETFs can enhance covered call portfolios by providing high premium yields, but they also carry downside risks [1][9] - The article discusses strategies to utilize high IV securities while maintaining a focus on capital preservation [1][9] Investment Strategy - The Global X Uranium ETF (URA) is highlighted as a high IV ETF, trading at $49.43 on 9/22/2025, with the potential for in-the-money (ITM) covered calls to offer downside protection [2][5] - ITM covered calls can maximize returns as long as the stock price remains above the strike price [5][10] Option Analysis - The $49.00 near-the-money strike has an IV of 47%, which is significantly higher than the S&P 500, indicating a strong potential for returns [5][10] - Delta is a crucial metric in selecting ITM strikes, with a high Delta indicating a greater probability of the option expiring ITM [5][6] Trade Calculations - A deep ITM call strike at $42.00 shows a Delta of 90.6%, suggesting a 90.6% probability of expiring ITM, which aligns with the desired risk tolerance [10][11] - The breakeven price for the trade is calculated at $41.63, with a projected 26-day return of 0.88% and an annualized return of 12.37% [11] Risk Management - The downside protection from the time-value profit is estimated at 15.03%, making the trade appealing for those seeking a balance between risk and return [11]