Options are a special type of investment contract that allows the investor to control large blocks of common stock without tying up their capital. Calls and puts are the two types of option contracts that are available. This is an investment strategy that is more complicated than simply buying common stock or bonds and holding on to them. However, there are ways that an ordinary investor can use calls and puts to boost the rate of return of their investment portfolio.
There are many different types of trades that can be put together with call and put contracts. Some can be quite risky for the average investor. There is one play that is very conservative that the typical investor can do well with. This strategy is called the covered call strategy. It is a low risk trade that generates immediate income when you begin the transaction.
Covered calls are such a risk free and easy trade to make it is surprising that more individual investors have not caught on to it. With a covered call trade you will be taking advantage of the power of leverage. Leverage is when you control assets without paying the full value of the asset. With call and put contracts you can control large blocks of common stock without actually having buy the underlying stock. You can buy and sell the stock as if you owned it. Statistically most calls expire out of the money. It is only rare when you must close a position by purchasing the underlying contract. As a seller of call contracts, you can depend on over 90% of your trades ending profitably for you.
This trade is extremely liquid. It is easy to terminate the trade for only a minimal loss, but this happens rarely because most call contracts expire with no value. This mean as a seller of the contract you made a nice profit off of the premium you received when you sold the contract. Now you may turn right around and sell another call contract on the stock and make some more profit.
When you set up a regular process of selling covered call contracts you will have income streaming into your account on a consistent basis. While each individual trade may only earn a relatively small amount, it begins to add up to a substantial income. It is the closet thing to having a money machine that you can think of.
Buying a put contract is the same as going short on the market. If you suspect that a stock is going to decrease in price, you can buy a put contract instead of buying the stock itself. The put contract costs only a fraction of the cost of selling the stock short. This limits that amount that you can lose. It is a safer way to sell the market short.
As an individual investor it is year responsibility to understand what you are doing with your money. Once you have investigated the covered call investment technique you will be totally convinced. You will be convinced because only a fool would turn down easy real income. This is real money that you can spend as you wish. It is for practical purposes free money.
For most typical investors, covered call contracts are the only options strategy they need to use. It is a safe, low risk, income producing activity. Anyone with a sizable stock portfolio should be using this method. It is not difficult to open an account online to begin making money with covered call contracts.
There are many different types of trades that can be put together with call and put contracts. Some can be quite risky for the average investor. There is one play that is very conservative that the typical investor can do well with. This strategy is called the covered call strategy. It is a low risk trade that generates immediate income when you begin the transaction.
Covered calls are such a risk free and easy trade to make it is surprising that more individual investors have not caught on to it. With a covered call trade you will be taking advantage of the power of leverage. Leverage is when you control assets without paying the full value of the asset. With call and put contracts you can control large blocks of common stock without actually having buy the underlying stock. You can buy and sell the stock as if you owned it. Statistically most calls expire out of the money. It is only rare when you must close a position by purchasing the underlying contract. As a seller of call contracts, you can depend on over 90% of your trades ending profitably for you.
This trade is extremely liquid. It is easy to terminate the trade for only a minimal loss, but this happens rarely because most call contracts expire with no value. This mean as a seller of the contract you made a nice profit off of the premium you received when you sold the contract. Now you may turn right around and sell another call contract on the stock and make some more profit.
When you set up a regular process of selling covered call contracts you will have income streaming into your account on a consistent basis. While each individual trade may only earn a relatively small amount, it begins to add up to a substantial income. It is the closet thing to having a money machine that you can think of.
Buying a put contract is the same as going short on the market. If you suspect that a stock is going to decrease in price, you can buy a put contract instead of buying the stock itself. The put contract costs only a fraction of the cost of selling the stock short. This limits that amount that you can lose. It is a safer way to sell the market short.
As an individual investor it is year responsibility to understand what you are doing with your money. Once you have investigated the covered call investment technique you will be totally convinced. You will be convinced because only a fool would turn down easy real income. This is real money that you can spend as you wish. It is for practical purposes free money.
For most typical investors, covered call contracts are the only options strategy they need to use. It is a safe, low risk, income producing activity. Anyone with a sizable stock portfolio should be using this method. It is not difficult to open an account online to begin making money with covered call contracts.
About the Author:
Born To Sell's site is exclusively about covered calls investing. All of the features can be viewed at https://www.borntosell.com/features.
No comments:
Post a Comment