- Personal Finance
Covered Calls create more income
Covered Calls create even more income
Income investors can manage their own income by using only stocks and bonds. In addition to dividend payments, good quality stocks that meet our very high criteria for investing can provide additional income when you write (also known as sell) a covered call.
You should learn about this strategy. You can buy a stock and sell a covered call for more income. If the call is at least 90 days out, you will probably also get the dividend. Note here that ordinary investors, whose want to invest mainly for income should only buy stocks that share income with you.
For instance today you could buy QCOM at about $54.90. Write an October $60 call receive the dividend in September and the call premium of $1.25 per share. If they take your QCOM your gain is 11.75 percent.
Income investors should be writing calls on at least 10% of their holdings to create more cash and have the potential for an 11.75% capital gain.
If they do not take your call because the stock price falls, you are still the proud owner of a company that pays you income and increases that income every year. Pretty soon, you'll be able to write another call for even more income.
Try it ... you'll like it. But do your homework. Even simple investing requires a little work.
Very Truly Yours,