The Patient Offer: A Practical Australian Guide to Writing Covered Calls (Ximple Books)
What if a covered call were treated not as an income strategy, but as a genuine offer to sell shares?
The Patient Offer is a practical guide to writing covered calls for Australian investors. It begins with a simple but often neglected principle: never write a call unless you would willingly deliver the underlying shares at the strike price.
Rather than chasing the largest premium, this book places the ownership decision first. It shows investors how to decide which shares are genuinely available for sale, establish an acceptable owner sale price, assess the available strikes and expiries, and determine whether the premium adequately compensates them for the commitment being made.
The book also confronts the realities of Australia's smaller exchange-traded options market. Suitable contracts may have wide spreads, limited displayed depth, stale prices or very little trading activity. Sometimes the correct decision is to use a patient limit order. Sometimes it is simply to wait.
Inside, readers will learn how to:
- distinguish a genuine sale decision from a search for option income;
- understand covered-call payoffs, exercise, assignment and share delivery;
- evaluate strikes, expiries, premiums and position size;
- work with Australian liquidity constraints and broker procedures;
- account for dividends, franking, corporate events, costs and tax-sensitive timing;
- prepare a written trade plan before placing an order;
- manage expiry, closing transactions, rolling and assignment;
- keep practical records and build a repeatable decision process; and
- compare the completed strategy with continued buy-and-hold ownership.
The Patient Offer does not pretend that premiums are free money. A covered call retains most of the downside risk of owning the shares while limiting some of the upside. It may underperform simply holding the same investment-particularly after transaction costs, taxation and the opportunity cost of selling a company that continues to compound.
Success is therefore not measured by whether every option expires worthless. It is measured by whether the investor made an acceptable offer, honoured the resulting obligation and used the released capital intelligently after the position ended.
Illustrative discussions involving CBA and IVV show how the framework operates across both shares and exchange-traded products, including situations in which low option liquidity makes no trade the sensible outcome.
Written in the calm, conservative and owner-minded Ximple style, The Patient Offer is designed for investors who want a disciplined covered-call process rather than promises of effortless monthly income.
It is the companion to The Patient Bid and the second step toward The Patient Wheel: a complete framework for bidding for shares, owning them patiently, offering them for sale and deciding where capital should go next.
General information only. This book does not provide personal financial, investment, legal, accounting or taxation advice.
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