Stock Option Trading - Stock Options Investing
Client Logon
FREE INVESTMENT ARTICLE:
18 Warning Signs That You Should Dump a Stock  » Learn More
Rules of Thumb for Covered Call Option Investors
  1. Avoid writing covered calls over a period of earnings announcements because sudden price changes can occur.
  2. It's best to write at-the-money options unless you are consciously trying to play the market going up (out-of-the-money) or trying to be more conservative for safety (in-the-money).
  3. When trading covered calls, don't try to over trade by attempting to get every last $0.05. Writing covered calls is NOT a day-trading strategy. It involves monthly or quarterly time frames not hourly.
  4. Be consistent, work the covered calls every month. The objective when trading covered calls is to do ten trades at 4% not two trades at 20%. Don't try to over push the return.
  5. When writing out of the money options, consider writing at least 30 days before the option expiration date to get a better selling price.
  6. When looking for a buy/write investment opportunity be sure you have considered all the investments that meet your risk profile. Why invest your money to get a 7% return when a 15% return is available. PowerOptions will help you with this.
  7. Consider rolling your option positions before expiration if you can get your targeted profit. If you wait until they expire, you will be in the market trying to sell them again with everyone else. The prices will be depressed.
  8. If you think the market or a stock is on the way down, write deep in the money options.
  9. If you think the market or a stock is on the way up, write out of the money.
  10. Set a firm profit target (Return %, Annual return %, or dollars) and stick to it. Don't make a trade unless you make money.
  11. Don't panic if one of your stocks goes up and your options are all in the money. You can always roll the option out (another month or two) or up (go to the next higher strike price). And you will probably make money doing it.
  12. When you do a Buy/write covered call for a riskier stock, let the option expire. Don't get greedy and roll it again. Take your money and find a new buy/write.

14 DAY FREE TRIAL!

No credit card required · Easy tutorials to get started · Free Coaching Sessions

Start My Trial Now
Important: Your Password will be sent to you via email. Please make sure that your email is correct.
Covered Call Rules of Thumb - Covered Call Trading Rules of Thumb - Covered Call Trading Tips
Copyright © 2018 - PowerOptions® and SmartSearchXL® are registered trademarks of Power Financial Group, Inc.
Contact PowerOptions: (302) 992-7971 & support@poweropt.com
US Patents: 6,049,783, 7,165,042, 7,797,215, 8,200,569, 8,301,535, 8,595,123, 8,630,937

PRODUCTS | SUBSCRIPTION | ABOUT US | RESOURCES | BLOG | STORE | PRIVACY | SITEMAP
Follow Us On: Watch PowerOptions on YouTube Follow PowerOptions on FaceBook Follow PowerOptions on LinkedIN