I write covered calls every month. I also buy put contracts for every 100 shares i own. I will not ever buy stock without put contracts. I don't like risk. There are many strategies to use in the market. I have nothing to sell, just saying. I make and average 10-15% a month, return on equity. Don't just take suze's word. Do your research and make sure your getting un biased information! That way you can make informed investment decisions.
Most covered call writers should use an online discount broker. I pay $5.95 per stock and option transaction up to 1000 shares and an additional $0.75 per contract for options. If you invest $10,00 and generate a 1-month income of $330, your brokerage fee would be less than $20.
Covered calls were easy pickins' back in the 90's, used to love them, and there's still some great potential today in the right markets...premiums just aren't what they used to be using similar tactics.
"no upside potential and no downside protection! ". I agree with you partially since she says that cover calls are good when stocks are trading sideways. I found her too loud mouthed and lacking in fineness, but she stipulated the setting where cover calls are suitable.
Yes, absolutely. Simply buy back the option and now you can sell the stock or another option. This is what so many detractors don't understand. There is no one strategy that is right for everybody but you do need to be informed to make an educated decision.
Oh my gosh... if Suze says something, it must be gospel... NOT! Who cares what she thinks? She is such a ditsy, unattractive, loud mouth woman that I cannot stand to watch/listen to 2 seconds of her. I feel sorry for people who are desperate enough to tune in. BTW, covered calls are a great strategy; been doing them successfully for several years. Recent volatility has made them even better. But do your own study; never ever rely on Suze for your financial health.
CC writing is a great strategy that requires the option seller to protect against share depreciation. One way is to buy a protective put as suggested in one of the comments above.
I prefer to execute one of the many exit strategies available to us like rolling down or closing the short call position and selling the stock.
The best approach is to educate yourself before involking this strategy, paper trading and then designing a well-thought out plan. Do this and success is inevitable.
You are right,selling CC on stock you already own is better then just owning them. However,this is still not the best way to hedge your position.The wealthy do not own stock or sell calls without a protective hedge like a collar for example.(buy a put for proctection and then sell a call). These methods are used by prof. traders & fund managers but are seldom taught to the public;instead they promote CC to us; a stategy in which the stock can go to 0 with no downside protection except premium.
I have a great deal of respect for Suze Orman which is why I am saddened and disappointed that she would recommend covered call writing which is actually a very risky strategy. Amateurs and people who have been duped by seminar gurus use this but not professional traders who know inevitably you will lose all or most of your capital using this strategy in which you have relatively little gain, no upside potential and no downside protection!
Since stocks, on average, go up 10% a year, then what is the danger of selling a diverse portfolio (say 5-6 great stocks) of covered calls on stocks you would've bought anyway?
Just sell the calls that are far enough out-of-the-money that you very likely won't have to sell the stock, but meanwhile are taking in all these free premiums from the covered calls every month. You could stand to make 1-10% extra because of these premiums, plus reap the rewards of the stock throughout the year.
bauvil2003 I explained a collar do you really think I don't know what a CC is? Let me give you a definition perhaps even you can understand: you sell a option call against the underlying stock you own and hold the position until you by back thecall ,are forced to buy the stock or expiration date.Are you satisfied?How does this prove your point now that you've been proven wrong about my knowledge or lack thereof ? killing the messenger never adresses the issue!
I write covered calls every month. I also buy put contracts for every 100 shares i own. I will not ever buy stock without put contracts. I don't like risk. There are many strategies to use in the market. I have nothing to sell, just saying. I make and average 10-15% a month, return on equity. Don't just take suze's word. Do your research and make sure your getting un biased information! That way you can make informed investment decisions.
andrewb90atmedotcom 3 months ago
CC is pure stupidity !!!
mba2ceo 8 months ago
hey guys i like this video but enjoy this
JoDaFonda 8 months ago
how about credit spreads for income
optionsupdate 10 months ago
Most covered call writers should use an online discount broker. I pay $5.95 per stock and option transaction up to 1000 shares and an additional $0.75 per contract for options. If you invest $10,00 and generate a 1-month income of $330, your brokerage fee would be less than $20.
BlueCollarInvestor 1 year ago
What percentage of covered call income is lost to brokerage?
Quickfireflame 1 year ago
Covered calls were easy pickins' back in the 90's, used to love them, and there's still some great potential today in the right markets...premiums just aren't what they used to be using similar tactics.
CrapsSystemWin 1 year ago
"no upside potential and no downside protection! ". I agree with you partially since she says that cover calls are good when stocks are trading sideways. I found her too loud mouthed and lacking in fineness, but she stipulated the setting where cover calls are suitable.
terrafirmaterrafirma 1 year ago
I just started doing covered call yesterday.
skyer1201 1 year ago
she still looks like a buzzard
torchlakemi 2 years ago
thanks for posting that
j1crx 2 years ago
Yes, absolutely. Simply buy back the option and now you can sell the stock or another option. This is what so many detractors don't understand. There is no one strategy that is right for everybody but you do need to be informed to make an educated decision.
BlueCollarInvestor 2 years ago
Oh my gosh... if Suze says something, it must be gospel... NOT! Who cares what she thinks? She is such a ditsy, unattractive, loud mouth woman that I cannot stand to watch/listen to 2 seconds of her. I feel sorry for people who are desperate enough to tune in. BTW, covered calls are a great strategy; been doing them successfully for several years. Recent volatility has made them even better. But do your own study; never ever rely on Suze for your financial health.
finwest 2 years ago
@finwest
Then shut up and don't listen or comment jack!
tradeonnews 1 year ago
CC writing is a great strategy that requires the option seller to protect against share depreciation. One way is to buy a protective put as suggested in one of the comments above.
I prefer to execute one of the many exit strategies available to us like rolling down or closing the short call position and selling the stock.
The best approach is to educate yourself before involking this strategy, paper trading and then designing a well-thought out plan. Do this and success is inevitable.
BlueCollarInvestor 2 years ago
You are right,selling CC on stock you already own is better then just owning them. However,this is still not the best way to hedge your position.The wealthy do not own stock or sell calls without a protective hedge like a collar for example.(buy a put for proctection and then sell a call). These methods are used by prof. traders & fund managers but are seldom taught to the public;instead they promote CC to us; a stategy in which the stock can go to 0 with no downside protection except premium.
pierrebrseven 3 years ago
I have a great deal of respect for Suze Orman which is why I am saddened and disappointed that she would recommend covered call writing which is actually a very risky strategy. Amateurs and people who have been duped by seminar gurus use this but not professional traders who know inevitably you will lose all or most of your capital using this strategy in which you have relatively little gain, no upside potential and no downside protection!
pierrebrseven 3 years ago
Since stocks, on average, go up 10% a year, then what is the danger of selling a diverse portfolio (say 5-6 great stocks) of covered calls on stocks you would've bought anyway?
Just sell the calls that are far enough out-of-the-money that you very likely won't have to sell the stock, but meanwhile are taking in all these free premiums from the covered calls every month. You could stand to make 1-10% extra because of these premiums, plus reap the rewards of the stock throughout the year.
A550RGY 3 years ago
buy a PUT u dipstick ! easy !! I've been doin it for years & even in this market conditions..u don't do it without PUTS!
usaqamadeeq 3 years ago
You probably have any idea about how to trade or covered call itself.
bauvil2003 2 years ago
bauvil2003 I explained a collar do you really think I don't know what a CC is? Let me give you a definition perhaps even you can understand: you sell a option call against the underlying stock you own and hold the position until you by back thecall ,are forced to buy the stock or expiration date.Are you satisfied?How does this prove your point now that you've been proven wrong about my knowledge or lack thereof ? killing the messenger never adresses the issue!
pierrebrseven 2 years ago