Top Nav

Covered Calls

Individual investors need to take a serious look at covered calls. This is especially true for investors who feel options are a highly risky trading vehicle.

covered-callsSo, what is a covered call?

By definition…a covered call is a conservative options strategy whereby an investor holds a stock or ETF in an asset and sells call options on that same asset to generate increased income. Unlike buying options outright, covered calls are a conservative strategy. In fact, covered calls are the only options strategy that is allowed in retirement accounts.

All you need to initiate the strategy is 100 shares of stock and a liquid options market. By liquid, I mean options with significant volume . If you own at least 100 shares of stock, then you have the ability to “sell a call” against your stock (assuming it has options, which most do). Remember, 100 shares of stock equals one option contract.

So why sell covered calls?

If you wish to bring in residual income on a consistent basis or if your market forecast is neutral to moderately bullish selling covered calls is the appropriate options strategy.

One Simple Strategy to Make 29.9% in the S&P 500

There is one simple options strategy to make money in this sort of range-bound market. It’s a strategy that beats both the bulls and the bears time and time again, and it’s called the “iron condor.” Options traders have a huge advantage over other typical stock-only investors because they can use strategies that generate profits [...]

The Only Way to Gain an Edge Trading Options

Here is one of the secrets of my success in options trading. This strategy gives me an edge.

Warren Buffett: Buy These Stocks Now

Warren Buffett believes every serious investor should read this little-known book. It's No. 1 on Buffett's list of top investment books.

Income Cycle Step 2: Triple Your Income

I believe the income cycle is the very best strategy to earn regular income with less volatility. Here are the details on how to nearly triple your dividend payout using Intel shares.

The First Step in the ‘Income Cycle’ Begins Here

Today, learn how to buy the best stocks at the best price. It's the first step in my three-part series on the Income Cycle.

More Recent Covered Call Articles

View All Covered Call Articles

Income and Prosperity Offer

Income & Prosperity is designed to help you seek out the safest income opportunities and discover an entire world of dividend investments. This free newsletter has a laser-like focus on one issue and one issue only: how can investors near or in retirement generate more income. Each day, you'll receive our best investment idea - skewed towards safe income - but also including lesser known opportunities to grow your wealth while keeping it out of harm's way.
You've successfully subscribed, click the link in your email to confirm your subscription.
There was an error, and you have not been subscribed, please try again.