https://www.fortunesandfrictions.com/post/call-me-maybe
I spent some time looking into options, and decided they weren't for me. A possible exception was in a retirement account, when you want leverage: deep in the money calls give you leverage. But when I determined the effective interest rate, it didn't make sense.
The above link is to someone advocating a covered call strategy. I would emphasize that the author is advocating such a strategy for only a subset of investors, and a small subset at that.
The subset are those who know the price that they want to sell at.
"Sell these calls at the exact strike price you want to get out of your stock position...If you own a stock already, and you know the price you want to get out, why not collect income along the way?"
That sounds reasonable to me. But I'm not an option expert, and undoubtedly there is a downside to this that I'm not aware of.
Comments?
H/t to Abnormal Returns for the link.
I spent some time looking into options, and decided they weren't for me. A possible exception was in a retirement account, when you want leverage: deep in the money calls give you leverage. But when I determined the effective interest rate, it didn't make sense.
The above link is to someone advocating a covered call strategy. I would emphasize that the author is advocating such a strategy for only a subset of investors, and a small subset at that.
The subset are those who know the price that they want to sell at.
"Sell these calls at the exact strike price you want to get out of your stock position...If you own a stock already, and you know the price you want to get out, why not collect income along the way?"
That sounds reasonable to me. But I'm not an option expert, and undoubtedly there is a downside to this that I'm not aware of.
Comments?
H/t to Abnormal Returns for the link.
Statistics: Posted by Park — Sat May 25, 2024 12:09 am — Replies 0 — Views 22