When entering a covered write with a LEAP, the investor hopes that the short-term call written against the LEAPS will expire worthless. The investor can then “roll” the short-term call to further-out months with the goal of collecting additional premium month after month. There are three risks with covered call – LEAP strategy: Stock price …
How to Manage Risk with a Covered Call & Leap Strategy Read More »
The covered call trade has always been known as an income strategy as you receive premium for selling calls against your stock. This is the most popular rationale for implementing this type of tradings. However, there are many more dimensions that can be coupled with covered call trading to further enhance the potential for profits. …
We at Get Rich already know the path to wealth is having multiple streams of income that we create each month using covered call trades and monthly income dividend stocks. This article from Entrepreneur magazine captures the tips we live by each day. See the full article here Millionaire. It’s a title that plenty of us …
There are two types of volatility used in security analysis: historical volatility measures the past price movements and implied volatility that indicates the potential level of future volatility a security is implying. Historical volatility (HV) is the price changes of a security over a period of time so it is really a standard deviation calculation. …
Options Basics – How to Use Volatility in Covered Call Trades Read More »
Many investors get too excited while seeing the high potential return based on high premiums. There is always a reason that a call premium is higher than normal. It may be a fad stock, potential takeover target or expecting some news release that may affect stock price. The time premium on these stocks is big …
To replace your job income you must determine how to generate different streams of income. the easiest way to do this is through passive dividend income. You can start with one monthly dividend check and increase it to as many checks as you want to receive each month. I have known people who collect more …
Blueprint for Creating a Monthly Income from Dividends Read More »
After bottoming out in October, the equities market bounced back with an impressive march higher. But faster than you can say “Happy birthday, bull market,” government shutdowns and other items loom in the horizon. So, if you’re like most U.S. investors, you’ve probably got quite a few stocks in your portfolio that are now trading below …
When getting started in covered call trading you have so many options available that it can be overwhelming to determine where to begin. Before you place any trades, you have have an ideal of what your perspective should be. This is where you want to keep it simple so you don’t get stuck in option …
The greatest source of risk in a covered call trade is the stock you own in the trade. Losses are almost always the result of a price decline in the stock or the overall market. Here is a list of primary risks in covered call trades. Decline in the stock’s price forces the trader to …
