Make Money Selling Covered Options

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Make Money Selling Covered Options

http://www.profitableinvestingtips.com/profitable-investing-tips/make-money-selling-covered-options

A handy way to increase your income from stocks that you own is to make money selling covered options. If you are doing it right, you routinely look at your stock portfolio. You do both fundamental analysis and analysis of market sentiment. You keep stocks that you believe will continue to go up in price and you sell those that are likely to fall. But, what do you do with those dividend stocks that pretty much stay at the same price month after month? How about stocks that you expect to go up gradually but not for a year or so? Here is where you can make money selling covered options.

What Is a Covered Option?

An options contract gives the buyer the right to buy the underlying equity in the case of a call contract or sell in the case of a put contract for a set price at any time during the term of the options contract. The seller receives a premium for taking on the risk of an unexpected move up or down of the underlying equity. A covered stock option is when the seller owns the underlying stock. An uncovered option is when he does not. In looking at how to make money selling covered options we start with selling call options on stocks that you own.

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Make Money Selling Covered Options

  1. 1. Make Money Selling Covered Options
  2. 2.  A handy way to increase your income from stocks that you own is to make money selling covered options. http://www.profitableinvestingtips.com/profi table-investing-tips/make-money-selling- covered-options
  3. 3.  If you are doing it right, you routinely look at your stock portfolio. You do both fundamental analysis and analysis of market sentiment. http://www.profitableinvestingtips.com/profi table-investing-tips/make-money-selling- covered-options
  4. 4.  Before We Continue… Click the links below to get your FREE training materials. Free Weekly Investing Webinars Don’t miss these free training events! http://www.profitableinvestingtips.com/free-webinar Forex Conspiracy Report Read every word of this report! http://www.forexconspiracyreport.com
  5. 5.  You keep stocks that you believe will continue to go up in price and you sell those that are likely to fall. http://www.profitableinvestingtips.com/profi table-investing-tips/make-money-selling- covered-options
  6. 6.  But, what do you do with those dividend stocks that pretty much stay at the same price month after month? http://www.profitableinvestingtips.com/profi table-investing-tips/make-money-selling- covered-options
  7. 7.  How about stocks that you expect to go up gradually but not for a year or so? http://www.profitableinvestingtips.com/profi table-investing-tips/make-money-selling- covered-options
  8. 8.  Here is where you can make money selling covered options. http://www.profitableinvestingtips.com/profi table-investing-tips/make-money-selling- covered-options
  9. 9.  What Is a Covered Option? http://www.profitableinvestingtips.com/profi table-investing-tips/make-money-selling- covered-options
  10. 10.  An options contract gives the buyer the right to buy the underlying equity in the case of a call contract or sell in the case of a put contract for a set price at any time during the term of the options contract. http://www.profitableinvestingtips.com/profi table-investing-tips/make-money-selling- covered-options
  11. 11.  The seller receives a premium for taking on the risk of an unexpected move up or down of the underlying equity. http://www.profitableinvestingtips.com/profi table-investing-tips/make-money-selling- covered-options
  12. 12.  A covered stock option is when the seller owns the underlying stock. http://www.profitableinvestingtips.com/profi table-investing-tips/make-money-selling- covered-options
  13. 13.  An uncovered option is when he does not. http://www.profitableinvestingtips.com/profi table-investing-tips/make-money-selling- covered-options
  14. 14.  In looking at how to make money selling covered options we start with selling call options on stocks that you own. http://www.profitableinvestingtips.com/profi table-investing-tips/make-money-selling- covered-options
  15. 15.  Calls, Puts, Covered and Uncovered Covered Uncovered Call Stock owner gets premium and keeps stock if it remains stable or goes down. Trader gets premium but can lose significantly if price of stock goes very high. Put Stock owner gets premium and keeps stock if it remains stable or goes up on price. Trader gets premium but can lose significantly if price of stock goes very low. http://www.profitableinvestingtips.com/profi table-investing-tips/make-money-selling- covered-options
  16. 16.  Knowing Your Stock http://www.profitableinvestingtips.com/profi table-investing-tips/make-money-selling- covered-options
  17. 17.  It is common for novice investors and traders to see a stock go up in price and simply believe that it will keep going. http://www.profitableinvestingtips.com/profi table-investing-tips/make-money-selling- covered-options
  18. 18.  However, there are stocks that routinely trade within channels. http://www.profitableinvestingtips.com/profi table-investing-tips/make-money-selling- covered-options
  19. 19.  If you own a stock that does this, there are two ways to make money selling covered options. http://www.profitableinvestingtips.com/profi table-investing-tips/make-money-selling- covered-options
  20. 20.  If the stock is nearing the top of its normal trading channel you can often assume that it will not go a lot higher. http://www.profitableinvestingtips.com/profi table-investing-tips/make-money-selling- covered-options
  21. 21.  You can sell call options on your stock, collect the premium and repeat the same process each cycle of the stock price. http://www.profitableinvestingtips.com/profi table-investing-tips/make-money-selling- covered-options
  22. 22.  Likewise if your stock is nearing the bottom of its normal trading range you can often be assured that it will not fall much farther. http://www.profitableinvestingtips.com/profi table-investing-tips/make-money-selling- covered-options
  23. 23.  As such you will be able to sell put options on your stock, make money selling covered options and repeat the process each stock price cycle. http://www.profitableinvestingtips.com/profi table-investing-tips/make-money-selling- covered-options
  24. 24.  Stock Profits http://www.profitableinvestingtips.com/profi table-investing-tips/make-money-selling- covered-options
  25. 25.  As this article points out there are more than one way to make money investing. http://www.profitableinvestingtips.com/profi table-investing-tips/make-money-selling- covered-options
  26. 26.  Dividend stocks provide a nice quarterly income. A well-chosen stock will go up in value over time. http://www.profitableinvestingtips.com/profi table-investing-tips/make-money-selling- covered-options
  27. 27.  And, you can make money selling covered options, calls or puts, on stocks that you own. http://www.profitableinvestingtips.com/profi table-investing-tips/make-money-selling- covered-options
  28. 28.  The way to make money is to track your investments, develop the necessary skill sets for picking stocks and learn how to use tools like options to enhance your return on investment. http://www.profitableinvestingtips.com/profi table-investing-tips/make-money-selling- covered-options

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