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High Yield Covered Calls and You

June 19, 2012 | Comments: 0 | Views: 107

If you are looking for a new way to invest your money then you may have heard about high yield covered calls and investing needs. This is something that a lot of yield-oriented investors are into. Make sure though that you understand that you could end up losing money on this as with any type of investment.

Make sure, too, that if you are looking into investing your money into something that you may not have tried before, you have to talk to people whom you trust. Know what they are doing. You will need to understand investing and the stock market to get a good handle on what you are doing with this type of investing. See to it that you don't just jump in and throw a bunch of money away. This is a great way to generate recurring income so see if you can't be successful at it.

You can start thinking about writing covered calls more effectively. Some people, who are feeling under the weather, decide to do a little research on the internet. There is so much information on the web that you can review to start. When you have the time to devote a few hours and you want to improve your skills, take the time to do a search. There are tons of great articles and how to's available, even when you have the flu!

Whenever you sell a stock, the IRS wants to know your cost basis so they can subtract that from any proceeds you received and then calculate your taxable profit. However, when trading covered calls, how should you handle the call premium relative to your cost basis? Normally, the option side of the trade and the stock side of the trade are treated as two separate transactions. Your cost basis for the stock side then, would just be the price you paid for the stock, and your cost basis for the option side would be the amount you received for the option, less any amount you paid to buy the option back.

People spend much of their time trying to improve on things that they find interest in. How to write covered calls is important because it is their livelihood and puts food on the table for their family. Always stay on top of the latest ideas on how to improve your skills for your company. This will make you better rounded.

More information about stock investing here: Born to Sell.

Source: EzineArticles
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