Definition, Examples & Resources:Covered Return'
Covered return can be calculated for setups where options premium is collected at trade entry. A list of compatible setups is given below:
- Short Puts
- Covered Calls
- Any other net short options setup
This criterion is a measure of profitability and therefore, can be added either to the top level of your strategy tree or under an appropriate custom group for maximizing potential trade profitability.
Covered return can be added to any strategy criteria with one of the two recommended objectives:
1) Either add to your strategy with the objective to maximize or
2) Add to your tree and target a specific return you are looking for. If you choose the latter method, make sure to target a realistic return and weight the criterion appropriately.
Covered Return can be found under the Profitability Panel in the Brutus Options Ranker Strategy Builder page:
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