Chuck Hughes: Monthly Dividend Strategy Can Provide Excellent Returns

[1994g0]

Good strategy.But it`s better when it`s wedded to the dividend capture strategy.Buy stocks with bullish charts a few days before their ex date.Then, sell calls against the stock just above (strike price) the price you buy it at.This way you get the dividend and call premium.Keep writing the calls until the stock is called away.This strategy produces excellent returns.

[vhehn]

why dont you just sell naked puts? it has the same risk as covered calls.

[TraderHughes]

Selling naked puts does not have the same risk as covered calls. If you sell a put and the underlying stock declines 10% you could lose 50% on the short put depending on the strike price. I can't take this risk with my subscribers. If you write a covered call and the stock declines 10% you may not have a loss or a small loss depending on the strike price.