Covered Calls Primer Money For Nothing: How to Find The Best Stocks

Writing covered calls is not quite “Money for nothing”, but it is as close to free money as I’ve been able to find.

I spend roughly an hour every other week looking for possible covered call opportunities, reviewing my existing covered call positions, and/or rolling those positions at risk of getting exercised.

This article explains what covered calls are, how you find good  covered call opportunities,and how to actually write (sell) covered  calls. I’ll also cover the risks of writing covered calls (miniscule)  and how to roll up and out a covered call at risk of being exercised.

Finally, I’ll provide some specific examples of stocks that are good candidates for writing covered calls versus stocks that are not as good a  candidate.

Covered Calls

A covered call option is a financial transaction in which the writer  (seller) of the call option receives a premium (cost of the option) in  return for granting the call option buyer the right to buy the specified  number of shares from the investor at the agreed upon strike price for a  period of time determined by the option expiration date.

The buyer of the covered call has the right (not obligation) to purchase the underlying shares from the investor at the option strike price anytime up through the option expiration date.

Where Do You Find Listed Stock Options?

Look up a stock using the search bar at the top, look just below the  current stock price for the line of blue links, and near the right side you will find the options link. A snip is provided below.

Swipe up now to read the full post!