Covered calls are a conservative income-oriented investment strategy. This document shows two academic studies that prove covered calls lower portfolio volatility and increase yields.

1. Why Use
Covered Calls?

2. • What do covered calls do for you?
– Lower portfolio volatility
– Increase portfolio returns

3. Proof point #1:
• 15-year study by Univ of Massachusetts
• Sell 1-month covered calls on RUT
• Summary: “The cumulative growth of the
buy‐write strategy over the 15 years of our
study far surpasses that of the Russell 2000,
with less volatility.”

4. • 15 years of using the strategy

5. Proof point #2:
• 23-year study by Asset Consulting Group:
– BXM: S&P 500 at-the-money buy-writes
– BXY: S&P 500 2% out-of-the-money buy-writes
• Summary: Both BXM and BXY outperformed the
S&P 500 with higher annual returns and lower
volatility.

6. 23 years of using the strategy:

7. Returns for time periods ending 12/31/11

8. • For additional reasons to use covered calls,
visit:
http://www.borntosell.com
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