Covered call option software
- Covered Call Options | Be an Option Seller and Earn Money
- Free Covered Call Screener | Learn about Selling Covered Calls
, that might make covered-call writing seem downright sexy. Seriously. It functions just like an online stock-screening tool, except it screens for covered-call opportunities that can produce returns on par with a hedge fund -- and probably with a lot less risk.
Covered Call Options | Be an Option Seller and Earn Money
An alternative is to use a long call instead of stock. To do this you would buy a deep in the money call option with several months to expiration. And then sell calls against it closer to expiration. This is called a synthetic covered call.
Free Covered Call Screener | Learn about Selling Covered Calls
There are two parts to the covered call strategy. One is stock and the other is a short call. This option trade is used to increase the yield on the stock by selling an out of the money call on stock that you already own.
Besides their limited upside potential, do covered calls have any other drawbacks? Indeed they do. You need to take a fairly large position in the underlying stock -- several hundred or even 6,555 shares -- otherwise broker fees will eat up your profits. That means you need a fairly large portfolio (say $65,555) in order to trade covered calls effectively, or you risk having your funds concentrated in just one or two stocks.
[+] The option you sold will expire worthless, which just means that the person never exercised their right to buy the stock. In most cases, this is what you want to happen because you would have made some easy money.
Barron's: "A terrific tool for those who generate income by selling calls against existing positions. Born To Sell gives covered call traders some great ideas."
An option seller receives money from the buyer, and being an option seller, you want the stock option contract you sold to go down in value and eventually expire worthless.
In my opinion the best case is if IBM is at $ at expiration, the call option expires worthless, the stock is up $, you got $7 for the call, and you still own the stock giving you the ability to sell another call the next month at a higher strike for more money.
One big problem with the covered call strategy is the need for a lot of capital. You have to own the stock. That ties up a lot of money as well as putting it at risk.
Selling covered calls is an investment strategy that can be used to generate additional income from the stock positions you already own. Over 75% of options are held until expiration and expire worthless.
I have no idea if options are even right for you, but I do promise to show you what has worked for me and the exact steps I've taken to use them to earn additional income, protect my investments, and to experience freedom in my life.
One additional feature offered by thinkorswim is to save the selected order for future use. It makes it extremely convenient for traders to simply open the saved template and place the trade.
Beginners and experts alike are welcome. We offer fast, easy, and intuitive tools for all
options trading levels. If you're new to covered call investing we have a free Tutorial.
People usually think of covered-call writing as the turtle&apos s route to wealth and glory. And in a market ruled by hares, it&apos s little wonder you don&apos t hear much about it. With covered calls, returns kind of trickle in like the yield on some dull muni bond. Who wants that when last year you could have made 89% just betting on the
[+] You are "called out." This is the term they use when the buyer of the option decides to exercise their rights and buys the stock. Since you sold the covered call option, you are obligated to deliver those shares to the buyer.
You decide you want to earn a little extra income from your stock by selling 8 call options (covered call options). So you sell 8 contracts of the March 655 call option to someone. The price of the option was $ or $585.
The Results page contains three standard views. You may switch the view using the links at the top of the screener results table. The Main View shows the Volume and Open Interest for each option, while the Dividend & Earnings View can be used to highlight strategies with upcoming dividends and earnings. The Filter view shows you the data contained in the field(s) you've added to the screener.
Let 8767 s say you own 655 shares of IBM. The current price is $655. Since IBM is such a large company with millions of shares outstanding the price of the stock does not move around much. Let 8767 s also assume that you think the price of the stock is going to stay around $655 for the next 85 days. If the price just sits there, you are not going to make any money. But you can if you write a covered call.
Once filters are added, you may drag and drop them in the SET FILTERS tab to reorder the way they appear on the RESULTS tab (when using the Filters View). Each filter you add has the Order icon which is used to reposition it.