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Making Money Even When a Stock Doesn't - Covered Calls | PowerOptions Web Log
The real beauty of the covered calls strategy is making money on a stock, even when the price of the stock doesn’t move. Yes, it’s nice to make the extra income for a covered calls position when the underlying stock increases in price and the position is rolled, but what really adds oomph to the covered calls strategy is the positions that make money when a stock goes nowhere or even drops slightly in price. For example, the PowerOptionsApplied Titanium advisory newsletter entered a covered calls position for Principal Financial Group (PFG) on 8/31/2009. The position entered is shown below: Sign up now for PowerOptions 14-day free trial Covered Call Position for Principal Financial Group Entered on 8/31/2009 Buy To Open Stock Sell To Open Call PFG POXIB (SEP 28) Price $28.19 $1.45 The position had a potential return of 4.7% if the price of PFG was greater...