Tag: covered calls
Why Smart Investors Use Covered Calls To Profit
Recent market volatility has both put traders on edge and pumped up the volatility in options. Those two usually go hand in hand and they create a great opportunity for longer term investors with a cooler demeanor to capitalize on the current dislocation. One of the best, and most popular approaches, especially among investors that […]
Here’s What A One-Year Covered Call In Microsoft Looks Like
In the era of ultra-low interest rates, yield enhancement strategies have become prolific. Actually, let’s take a step back. It used to be that you could generate a reasonable yield from fixed interest investments, like government or corporate bonds. However, with interest rates approaching zero, those types of investments just don’t provide robust yields. So […]
3 Oil Stocks That Are Worth Looking Into Now
Yesterday’s plunge in oil stocks creates opportunity Saber rattling in the Middle East created a roller coaster ride in asset prices this week. Oil prices initially ripped and then rapidly reversed yesterday, ending with a nasty 4% drop. Energy stocks fell across the board in the wake of the whiplash. While the volatility can be […]
Understanding A Covered Call Strategy
The other day, I wrote about how people are piling into funds, then employ option premium-selling strategies, particularly covered calls or buy-writes. I figure it’s a good time to drill down into exactly what these strategies entail and highlight both the pros and cons. The covered call strategy is one of the most popular options strategies especially among investors that […]
Is It Time To Start Buying Options Instead Of Selling Them?
In a world of ultra-low interest rates, it seems every investor is searching for yield. Of course, that should come as no surprise when 10-year notes are yielding something like 1.6%. A yield like that is certainly not going to fund most people’s retirement! Given the yield of government bonds, it’s also no wonder that […]
What’s In Store For Oil Now That Half Of Saudi Arabia’s Production Is Offline?
This week was supposed to be all about the Fed meeting. The September FOMC meeting is the first since July, and quite a bit is riding on what the Fed decides to do with interest rates. It’s one of the most critical FOMC meetings we’ve seen in years. However, the Fed’s thunder was stolen by […]
How To Get Paid An Income By Avid Coffee Drinkers
Coffee is one of those consumable goods that you simply don’t want to mess with. The country may fall into a deep recession. The ocean may rise to levels that engulf the coastlines. A meteor at this moment may be hurtling towards Earth. And yet, it won’t stop coffee drinkers from going to buy their […]
An Essential Options Strategy To Use As The Stock Market Hits New Highs
With the major indices pushing to all-time highs and some of the many names sitting on large double-digit percentage gains, this year alone, it can be difficult to not only hold on but climb aboard even the bluest chip names like Amazon (AMZN) and Microsoft (MSFT) at this stage. But, one strategy that helps overcome the psychological hurdle of […]
Buying A Covered Call On Chipmaker Up 75% YTD
There are primarily two companies known for producing the majority of computer graphics cards (GPUs). Most investors are familiar with NVIDIA (NVDA), which tends to be a high-flying, headline grabbing stock. However, Advanced Micro Devices (AMD) is also a huge player in the industry – but can often fly under the investment community’s radar. Lately however, it’s AMD […]
Selling Versus Buying Options: A Risk/Reward Comparison
Next week I’ll be speaking at the MoneyShow in Las Vegas. It’s one of my favorite experiences every year. Not only is it a great opportunity to meet and talk to other options traders, but I also get a lot of really good questions at the event. I decided that this year I’ll be more […]
3 Ways To Trade The Bull Market For Gold Stocks
Here’s one directional bet and two cash flow plays to take to the bank A new bull was born in gold prices late last year. And since then fundamental and technical forces have combined to drive the yellow metal higher. Spectators looking to get in on the action in gold stocks will be happy to […]
Get Paid To Own Gold
The markets may have recovered from the disastrous last quarter of 2018, but that doesn’t mean all the trouble is behind us. There is plenty of risk to take into account in the coming weeks. In other words, investors should remain cautious. The Fed decided not to raise rates in January and plans on being […]
3 Stocks To Buy As They Bottom
The bottom in AAPL, AMD, and WHR is in Head waiter, Jerome Powell, just served investors some profits on a silver platter yesterday. The Federal Reserve’s struck the perfect dovish tone for those who wanted to hear it — and everyone wanted to hear it. With risk assets now boasting the Fed’s backing, it’s time […]
Earn 12% In A Month On This Twitter Covered Call
Twitter (NYSE: TWTR) is one of those companies which often poses a conundrum to investors. On one hand, the microblogging site has become an essential tool for following breaking news and insights into everything from sports to finance to politics. On the other hand, despite the popularity, the company doesn’t have an obvious path to ramp up […]
Your Questions, My Answers For $7,050 In “Bonus” Monthly Payouts
We received many thoughtful questions after last Wednesday’s “options for income” editorial. (If you missed the original piece, you can read it in its entirety here.) Many of you are understandably interested in my favorite strategy for generating thousands of dollars in extra income each month regardless of what happens with the S&P 500. After all, it’s […]
A Super Cheap Way To Protect Yourself From Risk Overseas
One of the questions I get a lot when I speak at events like the MoneyShow and TradersExpo is about the benefits of looking at large options trades. Large trades using options, typically called block trades, are often executed by big firms with a lot of capital and resources. As such, block trades can be […]
2 Ideal Stocks To Generate Covered Call Portfolio Income
We’ve enjoyed a tremendous bull market from 2009 into early 2018, but for the past three months the S&P 500 has been in correction territory. Is this another hiccup in the journey upwards, or is it the start of another multi-year period of flat or negative returns? Some investors prefer to avoid that question and […]
3 Trades To Generate $1,000 Every Month Selling Puts
Enhance your monthly income with this options strategy For some time, I’ve been using naked puts and covered calls to generate monthly income by selling puts for my stock and options advisory newsletter, The Liberty Portfolio. Naked puts are options trades in which you sell the right for another investor to sell (“put”) a certain stock to […]
3 ETF Covered Calls To Earn Extra Income
If ETFs don’t pay a dividend, here’s how to get income from them anyway By now, most investors are feeling pretty good. The market has been on a tear. There’s no telling when it might correct or crash. So one of the questions I get a lot in the mailbag at my stock advisory newsletter, The Liberty […]
The Limitations Of Trading Options
I’ve always been a fan of options trading. In fact, I still use covered calls as a tool in my investing arsenal. That being said, options, when not used correctly, can pose a serious amount of risk to the unknowing investor. While options can be used as an effective tool for hedging and speculation, by nature […]
The Perfect 10% Payout For A Toppy Market
Worried about a pullback? I don’t blame you. But you shouldn’t stash your portfolio in cash when you can bank this 10% dividend and be protect yourself from a drop in the stock market. Rather than buying stocks for their payouts and hoping they don’t crash, you can extract more money from them – and protect your […]
3 Big-Money Option Trades
These 3 options trades are risky, but can offer nice premiums and a hedge Covered calls and naked puts can be very effective tools to both generate income and hedge long positions in any kind of stock. For some expensive stocks, however, they can offer very high premiums if you are willing to take on […]
The Beauty of Covered Calls
My goal and my promise to Peak Income readers is to secure for them a high and stable income stream, no matter their situation: in retirement, close to retirement, or just even thinking about retirement. I want paychecks to hit brokerage accounts every month, with consistency and low risk and without worry. No wonder I’m […]
3 Options Trades That Will Protect You From Harm
Sell calls against a long position and use the money to buy puts I’m not trying to sound the alarm and get everyone rushing for the exits, but according to the Shiller price-to-earnings ratio, the stock market is now the third most expensive it has been in history, behind only the market of 1929 and […]
How To “Write” Covered Calls For Safe 8% Yields
Most investors buy stocks and hope they’ll go up in price. They do nothing in the interim to generate cash flow from those stocks while they sit in their portfolio – like writing covered calls. “Write” what? I’ll explain. And I’ll also highlight some popular exchange-traded funds (ETFs) and closed-end funds (CEFs) that will help […]
Options Trading Strategies To Avoid For 2016
Options Trading Strategies To Avoid For 2016 Hard to believe but 2016 is right around the corner. While the financial markets don’t really care what calendar year it is, we as investors tend to like to group market conditions by the year. For instance, 2015 will most likely be the year of tepid growth and […]
Options Trading And The New Normal
Options Trading And The New Normal As we approach the end of the year, we can start to piece together what kind of year it’s been for US stocks. There are basically two different stories to tell in 2015. There was the August correction and subsequent rebound. And, there’s been a whole bunch of range-bound […]
Options Trading Is Much Better Than Stock Trading
Options Trading Is Much Better Than Stock Trading This is an options trading site, so of course we spend a lot of time talking about the benefits of options. I regularly point out the virtues of using options instead of stocks. That should come as no surprise to most people who trade options regularly. Yet, […]
A Better Way To Trade Gold And Silver
It’s been a rough year for precious metal investors. Both silver and gold have fallen nearly back to their late 2010 levels. In fact, gold’s down nearly 20% year-to-date. And, silver’s been hit even harder… down over 27% for the year. I’m not going to get into why the metals are selling off. That’s not […]
Do You Repair Or Do You Hedge Your Stock Position?
I’ve recently mentioned 1,310 on the S&P 500 as a level to watch. Now my focus is simply on 1,300 and if it can hold that level. Again today is another gap up day with immediate weakness. Yesterday, the S&P 500 stabilized for a bit in early trading with 1,317 as the trading area. But […]
Where To Hide In This Uncertain Market
What is an investor to do in this wild market? Should you liquidate your portfolio and run the risk of missing an uptrend like last year? Or do you stay in? These are questions that have plagued investors for decades. Last week, I suggested that we needed to buy and stay in defensive stocks. These […]
Don’t Let This Common Options Trading Mistake Trip You Up!
When properly used, the option market can be a sea of valuable information. But it’s easy to misinterpret this activity. I’ve heard some fellow traders compare option trading to a game of chess. This is a great analogy. With so many option strategies, the complexity can get particularly confusing for retail traders. Here’s the problem […]
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