Options Trading is a great way to generate some cashflow from the stock market. Just because your money is tied up to some stocks that you purchased doesn't mean that you can't make any extra income out of those stocks! That is what covered calls are for. If you are unfamiliar with options trading terms (or options trading itself), you can refer to this great website which will teach you more of the basics. This hub will feature an options trading strategy called covered calls.

Covered Calls are essentially call options contracts on stocks that you own yourself. It is called covered calls because the call options are backed by the actual stocks, and should the options contracts get exercised, you have the stocks to sell to the other party. The best strategy for covered calls is selling them (or in industry/financial terms, writing covered calls). By selling/writing covered calls you are effectively given the right but not the obligation to sell the stocks for an agreed price on or before the expiry date. By doing this, you get to earn a premium, which you get to keep regardless of whether you get exercised or not.

The great thing about selling covered calls is that you make money even when you don't get exercised. The best way to go about this is to ensure that the strike price of the call options that you sell are higher than your stock purchase price. That way, if you get exercised, you still make a profit from the sale of your stocks.

One other strategy you can use when writing covered calls is to find a strike price that is less likely to be hit by the market. This is a great strategy if you want to hold on to your stocks and don't want to get exercised. In this case, writing a call option would then become an income generating strategy, much like receiving rent for your asset (which is your stocks).

This is just a tip of the iceberg. Already you can see how powerful this options trading strategy can be if you know how to use it. Many people will tell you that options trading is a risky business, but when armed with knowledge and the skill of the experts, you will be able to successfully thrive in options trading. A great learning resource can be found with Planet Wealth. Check out their website here.