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Archive for October, 2010

Option Series #1 Covered Calls

Friday, October 1st, 2010

Ohio State football  coach Woody Hayes  is one of a few who is accredited with saying that when you put the ball in the air, three things can happen and  two of them are bad.  In the Equity markets three things can happen when you purchase a stock. It can go up, down or sideways.  Only one of these outcomes is good.  In contrast, with a Covered Call, the same three things can happen to the underlying stock yet two are good.

A covered call is an investment strategy that may help investors manage risk,  enhance returns and simply make money during sideways markets.  A covered call is one of the most conservative ways to participate in the equity (stock) market and this strategy actually entails less risk than simply being long (owning) a stock outright.

Covered Call