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17 Ιουλ 2007 · Covered Calls and Naked Puts: Create Your Own Stock Options Money Tree. by. Ronald Groenke. Publication date. July 17, 2007. Publisher. Keller Publishing. Collection. inlibrary; printdisabled; internetarchivebooks. Contributor. Internet Archive. Language. English. Notes. Obscured text on back cover. Access-restricted-item. true. Addeddate.
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.
Covered CALLS or Covered PUTS are the safest, as this type of Option is merely a vehicle to get some extra money from owning (and holding) the shares regardless of their price. To answer your question though and looking at an Option itself, your Option can fall to zero value (fast) but it will never lose you more than you paid - just a wipe out ...
The covered call strategy generally involves selling out of the money call options which cap the return of the underlying stock at the option strike price until the option expires. As an example, consider a portfolio that consists of 100 shares of Bank of Montreal (BMO) at a current price of $60, for a total value of $6,000.
Covered call writing is a conservative, low-risk, cash-generating strategy that combines stock ownership and options selling. Stock selection, option selection and position management are critical skills needed to achieve maximum success. In Chapter 2 of this series we will address Option Basics.
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.
4 Απρ 2024 · A covered call is a neutral to bullish strategy where a trader typically sells one out-of-the-money 1 (OTM) or at-the-money 2 (ATM) call option for every 100 shares of stock owned, collects the premium, and then waits to see if the call is exercised or expires.
