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I have one question on this. How do I decide when to sell the covered calls? For example let us say the stock price is currently $12 and I had bought the stock at $10 and holding it. I want to sell the $15 covered calls since I am planning to sell the stock if and when it reaches $15 anyways.
11 Μαρ 2024 · In simple terms, a covered call is an options trading strategy where an investor sells call options on a stock they already own. This strategy allows the investor to generate income from their stock holdings by collecting premiums from the call options. Why are covered calls important?
Selling covered calls means you get paid a lot of extra money as you hold a stock in exchange for being obligated to sell it at a certain price if it becomes too highly valued. That will cap your upside, but will generate high income in the meantime, even in a flat or bearish market.
Covered calls have become one of the most popular option strategies. Income investors can sell covered calls on a regular basis to collect premiums, while others can sell covered calls to exit an existing stock position or achieve limited downside protection.
12 Σεπ 2024 · Covered calls can be used to generate income and increase investment returns. Learn how this strategy can lower risk while increasing profits and what risks to avoid.
It’s a compact, easily understood guide to how the average person can effectively utilize options, specifically “ writing covered calls” to safely gain added returns. With 1-year bank CD rates at record lows due to quantitative easing, this is a very welcome tool that can help all investors increase their market returns.
What you’ll discover inside this book: The 6 criteria used to select the best stocks to write covered calls on; The vital difference between covered and uncovered calls; Why you shouldn’t write covered calls in an IRA; How to use covered calls to lower the purchase price of stocks you already own; 3 rules for adjusting your covered call
