I heard covered call selling was safe and produces excellent income
- Thread starter stock777
- Start date
It is NOT safe.
It is a <b>little bit</b> safer than holding stock without writing those calls.
It produces excellent income only when the markets are neutral or rising.
It's a losing strategy when the markets are falling.
There are safer strategies you can use. But if you a truly a beginner <i>and </i> you want a bullish position, writing covered calls is a good way to learn how options work.
Just don't do too many at one time.
Mark
http://blog.mdwoptions.com/options_for_rookies/
It is a <b>little bit</b> safer than holding stock without writing those calls.
It produces excellent income only when the markets are neutral or rising.
It's a losing strategy when the markets are falling.
There are safer strategies you can use. But if you a truly a beginner <i>and </i> you want a bullish position, writing covered calls is a good way to learn how options work.
Just don't do too many at one time.
Mark
http://blog.mdwoptions.com/options_for_rookies/
with the vix so high, if you've bought stocks where you think they can't go much lower a covered call strat might collect good premiums
this should have remained a 1 post thread. His point was that you might have gotten KILLED with the 'safe' and income producing cc strategy