Author Box
Articles Categories
All Categories
Articles Resources

Write Best Covered Calls for Maximum Profits

April 25, 2012 | Comments: 0 | Views: 111

Covered call writing provides a strategy that offers a downside protection. When you decide to write a covered call in such a manner that the strike price is higher than the market price of a stock, then in that case the purchaser may decide to buy the stock at strike price if the stock price moves up. But even if there is a decline in the stock price, then the purchaser may decide not to buy the stock from you but even under these circumstances, you have the premium to keep to yourself.

The services that help you in writing covered calls use their computer programs to sort through all of the options and using different criteria come up with suggestions about which ones will yield a profit and which ones are to be avoided. They are not foolproof but they do better than what investors used in the past. They are also able to keep up with the constantly changing information in a much better way than before. The problem is that in the end there is still a person who makes the decision on what to buy and sell, and that person can be affected by emotions. Emotions may cause a person to lose money.

Out of the Money Calls - These calls are the best covered calls you can write. In order to maximize income on a stable slow growing dividend stock, a prudent investor would strongly considering selling far out of the money calls. This allows the investor to collect the dividend and a premium on his stock unless it has an unexpectedly high bounce in price. The ideal stocks for this are predictable dividend players with a protective. The biggest risk in writing covered calls is that you might see a precipitous drop in value of the stock. If you write an out of the money call on a stock like this it is unlikely you would realize a loss great enough to make you want to sell and also unlikely you would be unhappy if you got called away from the stock at the price you wrote the calls at. In fact you would often simply collect the premium on the calls, your dividends, and still own the stock you were glad to own to begin with. You must remember that there is no such thing as a get rich quick strategy. Covered calls simply ensure small monthly incomes.

If you are an investor who is looking for covered calls, the "born to sell" offers best possible services.

Source: EzineArticles
Was this Helpful ?

 
0
 
0
 
Rate this Article
 vote(s)
Feedback
Print
Re-Publish

Article Tags:

Covered Calls

,

Best Covered Calls

,

Writing Covered Calls

Forex dealing is dealing in currency trading and basically includes dealing in foreign exchange while the stock market dealing is the dealing of stock in a standard market market. The two types of

By: Anil Mali l Investing > Stocks l October 25, 2012 lViews: 245

Investments in silver metal can be done by several ways. The article talks about the best ways of silver investments. Silver, the precious metal has always attracted investors for several reasons.

By: Kyles Humphrey l Investing > Gold Silver l August 17, 2012 lViews: 305

The article offers reasonable reasons for high oil prices. Crude is indispensable and it is a great source of energy. The prices on oil keep on altering, sometimes it is too high and sometimes it

By: Kyles Humphrey l Investing > Stocks l August 17, 2012 lViews: 286

Many investors are unaware of new tax that will be levied as part of the Supreme Court’s decision to uphold President Obama’s health care reform. The investment tax, as it is being referenced,

By: Ben Esget l Investing > Retirement Planning l July 17, 2012 lViews: 405

A few months ago, I was at Starbucks talking to someone about stocks and bonds, he and his wife had worked hard and were worried about the stock market. They wanted something much less risky. He

By: Lance Winslow l Investing > Stocks l July 11, 2012 lViews: 434

The first step in the risk management process is to acknowledge the reality of risk. Denial is a common tactic that substitutes deliberate ignorance for thoughtful planning.

By: Lawrence Tepper l Investing > Retirement Planning l July 10, 2012 lViews: 240

Forex dealing is dealing in currency trading and basically includes dealing in foreign exchange while the stock market dealing is the dealing of stock in a standard market market. The two types of

By: Anil Malil Investing > Stocksl October 25, 2012 lViews: 245

The article offers reasonable reasons for high oil prices. Crude is indispensable and it is a great source of energy. The prices on oil keep on altering, sometimes it is too high and sometimes it

By: Kyles Humphreyl Investing > Stocksl August 17, 2012 lViews: 286

A few months ago, I was at Starbucks talking to someone about stocks and bonds, he and his wife had worked hard and were worried about the stock market. They wanted something much less risky. He

By: Lance Winslowl Investing > Stocksl July 11, 2012 lViews: 434

If you are interested in doing business with your stock trading, you have to understand your stock trading system. You have many companies for your stock investment, which have been listed with

By: Puja P Rail Investing > Stocksl July 10, 2012 lViews: 252

It is amazing to know when the first Financial News paper in the world launched. There are many claimants, The Wall Street Journal founded by Charles Dow, Edward Jones, and Charles Bergstresser - all

By: Sam Richard Nicholsonl Investing > Stocksl July 06, 2012 lViews: 236

Some people think that it takes a lot of money to start investing in the stock market. However, you can easily start a brokerage account for as little as $25.

By: Omar Bestl Investing > Stocksl July 06, 2012 lViews: 211

Covered calls are the best way to earn good returns. Of all the option strategies, covered calls is the best.

By: Shalz Vl Investing > Futures and Commoditiesl April 24, 2012 lViews: 141

That was me a while back, playing the stock market and hoping to find that one "miracle buy" that will set everything down the right path for me. The trouble with the stock market was that there

By: Shalz Vl Investing > Futures and Commoditiesl April 23, 2012 lViews: 122

A call option will essentially give you the right to acquire a specific underlying stock, at a particular rate whereas a put option gives you the rights to dispose off any underlying stock at a

By: Shalz Vl Investingl April 18, 2012 lViews: 101

Discuss this Article

comments powered by Disqus