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Last Post: 3/19/2021 10:55:46 AM - Followers: 19 - Board type: Free - Posts Today: 0

Covered calls…sometimes referred to as the secret of the super wealthy. This board is dedicated to an investment strategy using covered calls, covered puts, and LEAP covered calls. We will probably concentrate mostly on covered calls. If you are familiar with the strategy you are way ahead. If not, put aside everything they you may have heard about trading options – the good, the bad, and the ugly - and follow along with a fresh start. The covered call strategy is basically owning a stock and then selling the option to someone to buy that stock from you at a later date. This is commonly referred to as a 'buy/write'. For doing this you will receive a ‘premium’. Today, February 21st, 2008, you can buy American Express (AXP) for $44.80 per share. There is someone out there right now that will pay you $1.80 per share to have the right to buy those shares from you next month on March 21st. If AXP is above $45.00 at that time, not only do you get to keep the premium, but you also get to keep the gain from $44.80 to $45.00 – an additional 20 cents. Total gain - $2.00. That is a 4.5% gain in just 29 days. How would you like to earn 4.5% on your money every month? A well managed covered call portfolio can easily give you 2.5% to 5% returns on average every month. Of course there is a down side too. Covered calls offer you limited upside, and unlimited downside. Therefore you want to sell calls on shares on companies that you feel comfortable with. AXP is not going to go belly up in the month. The selling of the covered call gives you some downside protection. If AXP is selling for $43.00 a share at the expiration of the option contract on March 21st, you still to keep your premium of $1.80 – you still own the stock. You basically broke even (less commissions) and you are ready to sell the April contract. In the market that w e are in now, downside principle protection is critical. Over several months to a year, covered calls can give you amazing downside protection. The covered call strategy almost requires a different mindset from investing in stocks. One wants to look to the stock bought as an income producing property that you rent for income. I have owned stocks that have given me premium income (rent) over about 18 months that has been equal to the original purchase price of those shares. Try doing that with a house or any other kind of property. This strategy requires much less time than following stock every day. There are just two critical market days each month that you will want to watch - option expiration day – the third Friday of every month. And, the first trading day after that Friday when you want to start selling calls for the next expiration. Disclaimer – Don’t rely on anything I say. DO YOU OWN HOME WORK. I tried trading options solely in the past and lost my butt. The covered call strategy has worked very well for me but may not for you. Start off slow and easy. This is not a get rich quick scheme. However, this strategy has the potential to give you consistent returns that will far exceed most other investments opportunities available. Please join us. Happy trading, Joe Stocks Interesting sites for Covered calls; http://compoundstockearnings.com/ http://www.coveredcalls.com/
#260   covered call ideas for GOLD needed PlayHarderTours 03/19/21 10:55:46 AM
#259   Joe Stocks 01/15/20 11:14:15 AM
#258   CTL - Long at 13.06 Joe Stocks 01/15/20 11:13:50 AM
#257   GEO - Long at 15.65. Joe Stocks 01/08/20 01:40:50 PM
#256   OT - Today is Veteran's Day. Joe Stocks 11/11/13 09:58:27 AM
#255   Hey Joe, been away from the lehnq board penny4dollars 10/30/13 07:13:50 PM
#254   Hey Luddy don't know what to say with penny4dollars 10/02/13 08:17:09 PM
#253   Joe, Vincent, most everybody on the nq board Luddy350 10/01/13 05:03:06 PM
#252   Thanks Penny. Those folks are clueless over there. Joe Stocks 09/30/13 02:34:49 PM
#251   Hey Joe, in case there is any penny4dollars 09/30/13 01:45:52 PM
#250   Hey Joe. I have been reading the Lehnq penny4dollars 09/23/13 09:11:23 PM
#249   I agree with your thoughts on the subject penny4dollars 09/11/13 03:33:04 PM
#248   Joe Stocks 09/11/13 02:42:25 PM
#247   Hey Joe just received this email what's your penny4dollars 09/11/13 02:05:48 PM
#246   Hey Joe, not sure you'll get this. I'm penny4dollars 09/11/13 09:40:30 AM
#245   penny4dollars 09/11/13 09:39:26 AM
#244   UNCOVERED CALL JimQuinceH 11/13/09 01:19:48 PM
#243   UNCOVERED CALL JimQuinceH 11/12/09 03:43:03 PM
#242   Nice trade there JIM. Joe Stocks 08/25/09 12:44:47 PM
#241   Option Excercise on HUN at $5 gave 2.65 JimQuinceH 08/25/09 11:42:41 AM
#240   No, When you sell a call against your farooq 05/18/09 11:44:24 AM
#239   Actually, its not worth my money or time anon.10 05/15/09 02:28:51 PM
#238   faroog, ive been gone 4 days thus no anon.10 05/14/09 04:50:53 PM
#237   ok, I understand now. If you own anon.10 05/14/09 04:31:19 PM
#236   I do not know what you are trying farooq 05/14/09 03:00:18 PM
#235   Also, if I had bot the call, 57.50 anon.10 05/14/09 01:43:48 PM
#234   why calls and not covered calls? anon.10 05/14/09 01:41:06 PM
#233   No you have all the risk minus premium farooq 05/11/09 07:23:28 PM
#232   ok, so I am protected here on my anon.10 05/11/09 06:56:12 PM
#231   Stupid is one who don't know and do farooq 05/11/09 10:54:59 AM
#230   ok, so if the price presently is $50, anon.10 05/11/09 09:58:32 AM
#229   ok, if I see price moving up to anon.10 05/11/09 09:54:48 AM
#228   You can write 15 % out of money farooq 05/11/09 08:39:36 AM
#227   ok, I want income while it is moving anon.10 05/10/09 09:05:07 PM
#226   First you need to give some info, farooq 05/10/09 10:37:18 AM
#225   ok, I don't know if this is the anon.10 05/09/09 05:28:33 PM
#224   Hi, Jim. I was gonna PM you Newly2b 04/24/09 08:30:40 PM
#223   UNCOVERED CALLS JimQuinceH 04/22/09 10:50:38 AM
#222   UNCOVERED CALLS JimQuinceH 04/20/09 12:15:36 PM
#221   Bought HUN at $3.55. Sold August $5 (strike) JimQuinceH 12/22/08 10:41:37 AM
#220   There's not a lot of action on this gtober 12/18/08 04:53:51 PM
#219   An ulcer trade. LOL. Good one. gtober 12/08/08 11:08:43 AM
#218   gtober...., Oooooops! That's an important part of the trade. m_winston 12/08/08 08:23:00 AM
#217   You keep your timeframes fairly short. Do you gtober 12/07/08 09:17:44 PM
#216   I only sell puts on stocks that I m_winston 12/07/08 07:02:00 PM
#215   Good strategy. I write a few here and gtober 12/07/08 05:37:33 PM
#214   I guess that when everyone is writing calls m_winston 12/07/08 04:30:34 PM
#213   "is attracting enormous interest from investors" gtober 12/07/08 04:01:28 PM
#212   Nice article on covered calls in Barrons......................... m_winston 12/07/08 03:48:15 PM
#211   Sold DFS Calls Dec 7.5 for 1.15 (DFSLU) m_winston 11/21/08 01:30:12 PM
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