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Next, sell a CALL on the 100 (or more) shares you own but at a higher valuation than its current price, so if you purchased the Stock at $3.00 for example, then a typical CALL might be sold at $3.25/$3.50 or maybe even $3.75 or above.
If you already own a stock (or an ETF), you can sell covered calls on it to boost your income and total returns. Income from covered call premiums can be 2-3x as high as dividends from that stock, and then you also get to keep receiving dividends and some capital appreciation as well.
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.
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.
Introduction . Covered call writing is a low-risk investment strategy that combines two different strategies: Stock ownership. Selling options. Most of you are familiar with buying and owning shares of stock but a low percentage of retail investors trades stock options.
Investors write covered calls primarily for the following two reasons: The potential to realize additional return on their underlying stock by earning premium. To gain some protection (limited to the amount of the premium) from a decline in the underlying stock price.