I was thinking about DCAing into 100 shares of SPY while also doing CSP for 5 Contracts.
Would the DCA help bring down cost basis or am I overthinking this?
DCA to bring down cost basis for covered calls?
byu/Charming_Jury_8688 inoptions
Posted by Charming_Jury_8688
1 Comment
There is the “cost basis” which is the cost paid for the shares and DCA should lower that basis which is easy math to calculate. Cost basis is an accounting term and does not change from that the shares cost.
Selling CSPs at varying strikes will both bring in premiums but also be assigned 100 shares pre contract at the cost basis of the strike. Are you ready and able to buy up to 500 shares of SPY for something like $250K?
Premiums from selling options can bring down the net stock cost to help sell CCs and still make a profit. This does not change the “basis” but your calculated net cost for the shares.