With a covered call and protective put strategy, you have a win – win- win –win situation. Here is what happens when the underlying stock changes: Stock price increases – you win by keeping the premium and either rolling up your call to a higher strike price or letting the stock get assigned; Stock price is …
Why don’t more people write covered calls? There are numerous reasons. The general population is unaware such an investment exists. Only a hand full of investing services promote them but popularity has increased as more brokers push option trading strategies these days. Also, they do require a level of education to learn them in depth. …
To start on the road to financial dependence, you must save some money. Most people start with an emergency fund, retirement account such as a 401K and maybe buy some real estate for rental income. Then, smart investors start creating additional streams of income. At Get Rich Investments, we like to buy world-class dividend stocks, …
One of the basic mistakes that new covered call traders make is that they trade for the highest premium available to maximize their monthly income without looking at the amount of risk they are taking on with this type of trade. When option premiums are high there is a reason for the increase in option …
To remind you, this trade involves holding at least 100 shares of a company’s stock, then selling call options against them (one options contract for every 100 shares you own). If the underlying stock declines, you’ll begin to see the option’s premium erode, too. But depending on the timeframe of the trade, you may see …
Implied Volatility (IV) gets high when a company has some impending event that can move the stock price. The impending event sometimes refers to the stock as being a special situation stock. The impending event causes the option IV to change based on the likely stock price move. Here are some causes that increase IV: …
How to take Advantage of High Implied Volatility Read More »
If options were always fairly priced, then we would expect the option price to always imply a level of stock volatility that is more or less in line with historic volatility (HV). But this not always the case. For example, two stocks are trading at $20 each with current month calls at $20; one calls …
How To Use Volatility in Selecting Covered Call Trades Read More »
At Get Rich Investments, we create investing strategies to capture monthly income. This may take the form of covered call trades, cash-secured put trades, CEFs for monthly dividends and other strategies. However, as the market volatility increases such as we have experienced lately, investors get worried about protecting their capital. We do have an answer …
Using a Protective Put to Prevent Investment Losses Read More »
As we approach the end of the September option expiration cycle, the Get Rich Monthly Income Plan had a great month for investors. In January, we kicked off the perpetual covered call strategy. For those who are new to this concept, let me share the rationale of this income investment. This strategy was created to …
As we approach the end of the August option expiration cycle, the Get Rich Monthly Income Plan had a great month for investors. In January, we kicked off the perpetual covered call strategy. For those who are new to this concept, let me share the rationale of this income investment. This strategy was created to …
