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Using Covered Calls for Safety

By Edited Nov 13, 2013 0 0

In the financial world, there are two kinds of risk. There is the unavoidable kind, like getting out of bed in the morning. Anything can happen. Then there's the avoidable kind, like in the money covered call options. In the money covered calls are a conservative investing strategy that protects you against moderate declines in the value of stocks you own. They work like this: you buy stock at a particular price, say 10 dollars a share, and sell a call option (the right to buy your stock) at 9 dollars a share. You pocket the fee for the option right away, and you are guaranteed a profit if the stock sells at 9 dollars or more a share when the option expires, but doesn't go past 10. It sounds complicated but is actually pretty straightforward once you've done it a few times. Get the best protection for your investments by checking out options.

 Sooner or later, you will find yourself investing more and more of your portfolio in ITM covered calls. As your retirement draws nearer, It would be nice to live off the earnings of this great investment strategy. Even as you grow older, you can still opt to put in money in this investment strategy because over time, you would prefer a slow but steady return of investment from your hard-earned money. Using covered calls is such an approach that gives you exactly just that, coverage from possible losses from a volatile market and at the same time, a steady return of investment being a conservative approach into investing. Indeed, this strategy has helped a lot of people get out of a slump and has made people realize that not all get rich quick schemes are real.

One great advantage of the internet age is the ability to conduct research on almost anything. This includes valuable research on your investments and a great tool to do just that is a covered call screener. This tool gives you the opportunity to locate and deal with the stocks that you are most comfortable with. Once you have the right stocks, you can start writing covered calls. This tool is invaluable because if you attempt to search all the options for of stocks for covered call strategy, it could take you the whole day just searching by hand. And as you get the results, you still have to filter through them by researching on them one after the other. With covered call screener, it does all the heavy research for you leaving you with the options that you want. You can input your preference as you search the internet so that the results you get are the type of stocks that you want.

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