If you are looking for a conservative investment opportunity, you might wish to check into writing covered calls. To write a call option means to sell it, but you cover the call option by owning the stock or securities mentioned in the option contract. In many cases, these kinds of options are bought and sold and the traders do not own the stock, they only own the options. When you own the stock to the options you have more chances to turn a profit. Here is additional information on writing covered calls strategy.
Normally an option simply gives one the right to buy or sell stock. However, when you own the stock you have some advantages and a slightly different trading strategy. Here is a look at ways selling or writing covered calls can be beneficial to beginning or experienced traders.
Ideally, it is best to sell options on stock and have the options expire. In this way, you are retaining the stock and also keeping the premium money. Once an option is expired you can write a new option on the same stock.
Maybe you want to sell an option contract for 100 shares of stock and a strike price of $60. You might have paid $45 per share for the stock, originally. If the price goes all the way up to $70 a share, your option holder will buy your stock at $60 a share. However, you make money from the premiums and also from selling your stock.
When you sell options in which you own the security, it is considered low risk. You are also getting the chance to make money two ways instead of one. This is especially effective if you have stock that you are not expecting to skyrocket in the future.
Writing covered calls as a style of trading is conservative as you face few risks. You also have the opportunity to make money more than one way. If you own stock and do not expect it to go up in value a great deal in the near who is interested in buying stocks or other investments such as commodities. You can purchase shares based on their ability to make money from options. You also can control the amount of risk that you take.
If you are seriously considering options trading, writing covered calls can be a conservative yet profitable strategy. You may be able to keep your stocks or commodities and still make money from them. This money is made from your options contracts that you sell or write
Normally an option simply gives one the right to buy or sell stock. However, when you own the stock you have some advantages and a slightly different trading strategy. Here is a look at ways selling or writing covered calls can be beneficial to beginning or experienced traders.
Ideally, it is best to sell options on stock and have the options expire. In this way, you are retaining the stock and also keeping the premium money. Once an option is expired you can write a new option on the same stock.
Maybe you want to sell an option contract for 100 shares of stock and a strike price of $60. You might have paid $45 per share for the stock, originally. If the price goes all the way up to $70 a share, your option holder will buy your stock at $60 a share. However, you make money from the premiums and also from selling your stock.
When you sell options in which you own the security, it is considered low risk. You are also getting the chance to make money two ways instead of one. This is especially effective if you have stock that you are not expecting to skyrocket in the future.
Writing covered calls as a style of trading is conservative as you face few risks. You also have the opportunity to make money more than one way. If you own stock and do not expect it to go up in value a great deal in the near who is interested in buying stocks or other investments such as commodities. You can purchase shares based on their ability to make money from options. You also can control the amount of risk that you take.
If you are seriously considering options trading, writing covered calls can be a conservative yet profitable strategy. You may be able to keep your stocks or commodities and still make money from them. This money is made from your options contracts that you sell or write
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If you're looking for Born To Sell news, check out Born to Sell. Another way investors ask "what is writing a covered call" is to say "how do I sell covered call options to generate income"? It's easy; see https://www.borntosell.com/covered-call-blog/how-to-write-a-covered-call.
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