Maximizing Income with Ford Stock
Trading strategy for Ford (F) stock, currently priced at $10.25 per share, focusing on selling cash-secured puts and covered calls, while using Exponential Moving Averages (EMAs) combined with a Trend Regularity Adaptive Moving Average (TRAMA) to guide decisions. The goal is to generate income from options premiums while managing risk and leveraging trend signals.
6/7/20252 min read
Strategy Overview
Objective: Generate consistent income by selling cash-secured puts to potentially enter Ford stock at a lower price and selling covered calls to earn premiums on owned shares, using EMAs and TRAMA for trend confirmation.
Stock: Ford (F) at $10.25 per share (assumed current price as of June 6, 2025).
Tools:
EMAs: To identify short-term and long-term trends for entry and exit signals.
TRAMA: To adapt to trend strength and reduce noise in choppy markets.
Options: Cash-secured puts (CSPs) and covered calls (CCs) for income generation.
Risk Profile: Moderate, with defined risk on puts (secured by cash) and calls (capped upside on owned shares).
Wait for Bullish Signal:
Monitor Ford’s stock (assumed $10.00) for the 9-day EMA to cross above the 21-day EMA.
Example: 9-day EMA rises to $10.10, 21-day EMA at $10.00 → Bullish crossover.
Sell Cash-Secured Put:
Trade: Sell a $9.50 strike put, 30 days to expiration, for $0.50 premium ($50 per contract).
Cash Required: $950 ($9.50 × 100).
Outcome:
Stock > $9.50: Keep $50 premium (5.26% return on cash reserved).
Stock < $9.50: Buy 100 shares at $9.50, effective cost $9.00/share. With bullish momentum, the stock may recover, allowing you to hold or sell covered calls.
Transition to Covered Call (If Assigned):
If assigned shares at $9.00 effective cost, wait for another bullish EMA crossover (or continued bullish trend) to sell a covered call.
Example: Sell a $10.50 call for $0.60 ($60 premium). If called away, profit is $10.50 – $9.00 + $0.60 = $2.10/share ($210 per contract).
Wheel Continuation:
If shares are called away, restart by selling another put on the next bullish EMA crossover, repeating the cycle.
Strategy with EMA 9/21 and TRAMA Confirmation
Assumptions
Ford Stock Price: $10.00 (hypothetical).
EMA Status: Hypothetical scenarios for bullish (9-day EMA > 21-day EMA) or bearish (9-day EMA < 21-day EMA) crossovers.
Options: Monthly expirations (4–6 weeks) for puts and calls, targeting out-of-the-money (OTM) strikes.
Goal: Use TRAMA to confirm EMA signals, improving trade timing and reducing false entries in the options wheel strategy.
TRAMA Implementation
Setup on Chart:
TRAMA and double EMAs (9 and 21).
Set TRAMA lookback to 14 - 17 periods or adjust based on backtesting for Ford’s volatility.
Plot 9-day and 21-day EMAs alongside TRAMA for visual confirmation.
Signal Interpretation:
Bullish: 9-day EMA > 21-day EMA, TRAMA sloping up, and price above TRAMA.
Bearish: 9-day EMA < 21-day EMA, TRAMA sloping down or flat, and price below TRAMA.
Neutral: TRAMA flat, regardless of EMA crossover, indicating a ranging market—avoid new trades.
Disclaimer: Not Your Financial Guru, Just ATC with a Plan!
Covered call and cash-secured put strategy for Ford stock, jazzed up with EMA 9/21 and a fancy TRAMA indicator. But let’s be real: this is just a base strategy, like a plain ol’ pizza crust before you add the toppings. It’s not tailored to your wallet, risk tolerance, or secret dreams of owning a Ford Mustang.
