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Covered Calls, Steven D. Dolvin
Covered Calls, Steven D. Dolvin
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A Covered Call is created by purchasing stock and simultaneously writing a call on that stock. The position limits upside, as the stock will be called away if the price rises above the exercise price. But, the premium from selling the call provides extra income, which is the primary reason for executing such a strategy. See the article here, WSJ.
Options For Everyone?, Steven D. Dolvin
Options For Everyone?, Steven D. Dolvin
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Options (and derivatives in general) are often painted by the media as financial time bombs. While they can be used for speculative trading, they can also be used for hedging as well. Unfortunately, many smaller investors are not skilled in their use, which has led to significant losses for many. See article here, NY Times.