Comments on: Boost Your “Yield” By Writing Covered Calls http://20smoney.com/2010/01/12/boost-your-yield-by-writing-covered-calls/?utm_source=rss&utm_medium=rss&utm_campaign=boost-your-yield-by-writing-covered-calls Aggressive Yet Responsible Wealth Building For 20-Somethings Sun, 12 Feb 2012 05:50:11 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: ratings http://20smoney.com/2010/01/12/boost-your-yield-by-writing-covered-calls/comment-page-1/#comment-11137 ratings Tue, 24 May 2011 11:43:52 +0000 http://20smoney.com/?p=1387#comment-11137 I haven't understand how you profit from the method you mentioned,I'm just a newbie in stock trading I haven't understand how you profit from the method you mentioned,I'm just a newbie in stock trading

]]> By: 20smoney http://20smoney.com/2010/01/12/boost-your-yield-by-writing-covered-calls/comment-page-1/#comment-3315 20smoney Wed, 13 Jan 2010 14:08:06 +0000 http://20smoney.com/?p=1387#comment-3315 Sean: a covered call is when you own the actual shares of a company, then you would "write" or "sell" a call option on that same stock. You can talk to your broker about what you'd like to do and he/she should be able to help. You would want to "sell to open" a call position for this strategy. As such, closing it out would be a "buy to close". hope that helps. if not, there are a bunch of Options 101 type articles on the internet, just do a little searching. Thanks. Sean: a covered call is when you own the actual shares of a company, then you would "write" or "sell" a call option on that same stock. You can talk to your broker about what you'd like to do and he/she should be able to help. You would want to "sell to open" a call position for this strategy. As such, closing it out would be a "buy to close".

hope that helps. if not, there are a bunch of Options 101 type articles on the internet, just do a little searching. Thanks.

]]> By: Sean http://20smoney.com/2010/01/12/boost-your-yield-by-writing-covered-calls/comment-page-1/#comment-3314 Sean Wed, 13 Jan 2010 02:09:28 +0000 http://20smoney.com/?p=1387#comment-3314 How do you make a covered call? How do you make a covered call?

]]> By: 20smoney http://20smoney.com/2010/01/12/boost-your-yield-by-writing-covered-calls/comment-page-1/#comment-3313 20smoney Tue, 12 Jan 2010 21:48:15 +0000 http://20smoney.com/?p=1387#comment-3313 I don't either. I made a mistake. It should be 8.4% --- basically look at 1.4% over 2 months -- if you take that over 12 months, you get an 8.4% in a very basic way of looking at it. 16.8 is completely false and I've fixed it thanks for the notice. I don't either. I made a mistake. It should be 8.4% — basically look at 1.4% over 2 months — if you take that over 12 months, you get an 8.4% in a very basic way of looking at it.

16.8 is completely false and I've fixed it thanks for the notice.

]]> By: Brad http://20smoney.com/2010/01/12/boost-your-yield-by-writing-covered-calls/comment-page-1/#comment-3312 Brad Tue, 12 Jan 2010 20:44:11 +0000 http://20smoney.com/?p=1387#comment-3312 Hi kevin, I like your blog alot. I have two questions. 1. How did you come up with the 1.4% return on your position and a 16.8% annualized return? I dont know how you came up with both those mathwise. thanks Hi kevin, I like your blog alot. I have two questions. 1. How did you come up with the 1.4% return on your position and a 16.8% annualized return? I dont know how you came up with both those mathwise. thanks

]]> By: 20smoney http://20smoney.com/2010/01/12/boost-your-yield-by-writing-covered-calls/comment-page-1/#comment-3311 20smoney Tue, 12 Jan 2010 18:12:38 +0000 http://20smoney.com/?p=1387#comment-3311 Thanks for the comment. I will plan on providing an update of the trades... I've also added a third covered call on my FXP position which has the best return out of all of them... update should be posted within the week or so. Thanks for the comment. I will plan on providing an update of the trades… I've also added a third covered call on my FXP position which has the best return out of all of them… update should be posted within the week or so.

]]> By: Jeff http://20smoney.com/2010/01/12/boost-your-yield-by-writing-covered-calls/comment-page-1/#comment-3310 Jeff Tue, 12 Jan 2010 17:57:23 +0000 http://20smoney.com/?p=1387#comment-3310 I commend your use of covered calls -- they are my sole method of investing and it is a very good, conservative strategy. It would be helpful if you would include the details of your trades to further educate your readers. For example, I always find it worthwhile to calculate the potential return if the stock price is unchanged at expiration as well as the return if the stock is exercised at expiration. For an example, view the most recent post on my Covered Calls Advisor blog: <a href="http://coveredcallsadvisor.blogspot.com/" target="_blank">http://coveredcallsadvisor.blogspot.com/</a> Regards, Jeff I commend your use of covered calls — they are my sole method of investing and it is a very good, conservative strategy.
It would be helpful if you would include the details of your trades to further educate your readers. For example, I always find it worthwhile to calculate the potential return if the stock price is unchanged at expiration as well as the return if the stock is exercised at expiration. For an example, view the most recent post on my Covered Calls Advisor blog:
http://coveredcallsadvisor.blogspot.com/

Regards,
Jeff

]]> By: 20smoney http://20smoney.com/2010/01/12/boost-your-yield-by-writing-covered-calls/comment-page-1/#comment-3309 20smoney Tue, 12 Jan 2010 13:55:40 +0000 http://20smoney.com/?p=1387#comment-3309 If company X goes over the strike price, you are forced to sell the stock. So you don't lose anything, but you lose potential additional upside profit. Your only risk in writing covered calls is that you limit your upside. If company X goes below $50, nothing happens, your options expire worthless, you keep the premium and you keep the stock. If company X goes over the strike price, you are forced to sell the stock. So you don't lose anything, but you lose potential additional upside profit. Your only risk in writing covered calls is that you limit your upside.

If company X goes below $50, nothing happens, your options expire worthless, you keep the premium and you keep the stock.

]]> By: Randy http://20smoney.com/2010/01/12/boost-your-yield-by-writing-covered-calls/comment-page-1/#comment-3308 Randy Tue, 12 Jan 2010 13:03:44 +0000 http://20smoney.com/?p=1387#comment-3308 Hi Kevin, I don't have much insight to options, but this post seems pretty interesting to me. I was also wondering, 1) How much would you lose if company X does go over the strike price? 2) What happens if company X goes below $50? Hi Kevin,

I don't have much insight to options, but this post seems pretty interesting to me. I was also wondering,

1) How much would you lose if company X does go over the strike price?

2) What happens if company X goes below $50?

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