Search Results
How to Construct a Collar Option
Covered calls are a popular way to generate income from an existing stock position, but they aren’t the best choice for every situation. For instance, covered calls have significant downside risk and don’t protect you from large losses or help you lock in profits. Fortunately, there are hundreds of different options strategies out there to […]
Best Option Trading Strategy for a Portfolio Paycheck
There’s an option trading strategy that’s practically a hidden reservoir of monthly income generation lying in your own investment portfolio’s proverbial ‘backyard.’ Becoming aware of this strategy and learning how to use it empowers you to start generating real income from your portfolio, quickly. While you may not have known about this great opportunity to put […]
Generating Income with Cash Secured Puts
Options are often seen as speculative instruments for traders, but many investors use them to generate income. In fact, the most sophisticated option traders use them to reduce risk, limit downside and boost the income on a stock portfolio. While covered calls are the most popular income strategy, there are several others that investors should […]
5 Sources of Retirement Income in 2022
Earning retirement income during uncertain economic times requires some creativity and optimism. With stock market volatility, a “set it and forget it” approach to retirement strategy likely won’t result in much extra income. Every investor is different and the right strategy for you reflects on your investment goals and interests. A blended approach can be […]
How to Protect Gains with Options
Most investors are happy with unrealized gains, but there’s always a risk of loss until they sell. Fortunately, there are a couple of options strategies that you can use to protect gains by locking in profits without immediately selling your stock. The key is finding the strategy that provides the right level of protection, upside […]
Using Covered Calls to Generate Retirement Income
Many retirees draw down their portfolios to finance their retirement, but generating income can help stretch your savings much longer. While dividend stocks and bonds are popular income investments, covered calls can provide an extra boost (and some downside protection). As a result, they may be a worthwhile addition to your retirement plan. In this […]
Are Covered Calls Good in a Bear Market?
You’re approaching retirement and suddenly the market moves sharply lower. More than ten percent of your portfolio has disappeared over the past month and you’re concerned that the bear market could worsen over the next couple of months. You’re starting to worry that you may have to adjust your retirement income expectations if nothing changes. […]
How to Write Covered Calls on ETFs
Writing covered calls on stocks is a popular way to generate an income from a portfolio of stocks, but you can also use covered calls on ETFs (Exchange-Traded Funds) and other securities. While the mechanics of setting up a covered call position are the same, there are some crucial differences between stocks and ETFs that […]
Calls and Puts: The Basics of Trading Options
When most people think about investing, they think about trading stocks, but that’s not necessarily the only (or best) choice for those looking to generate income from an investment portfolio. The trouble with regular stock trading is that you need a significant amount of money upfront to get started, and, in addition to choosing the […]
Tips for Managing Covered Call Positions
A covered call position is a great way to generate extra income from a stock portfolio. While the strategy is fairly straightforward, there are many nuances that can make managing a covered call position challenging—especially when the stock pays dividends or if the price is approaching the strike price near expiration. In this article, we […]
Buying Protection with a Married Put
The stock market is known for rising during both times of euphoria and fear. For instance, the stock market hit record highs during the COVID-19 pandemic despite extremely high levels of unemployment, a sharp contraction in gross domestic product and lofty equity valuations. Investors that continue to hold stocks during these times may worry about […]
How a Covered Call Advisor Can Help You Trade Options
Covered calls are an excellent way to generate income from a long stock portfolio, but options trading can be intimidating to those without experience. While you’re unlikely to lose your shirt trading covered calls, those looking to generate a steady income stream could benefit from a covered call advisor to help construct an optimal portfolio […]
Can I Trade Options on an Index
Passive investing has exploded in recent years. Investing in broad-market indexes has surged in popularity and costs less than ever before. You can take this approach to the next level by incorporating option trading in addition to index investing. The easiest way to trade options on an index is with the use of Exchange-Traded Funds […]
Add Covered Calls to Your Dividend Strategy
Many investors have turned to a dividend strategy as a way to generate income in today’s low interest rate environment. Unfortunately, most high-dividend strategies are relegated to specific sectors, such as utilities or real estate, which limits diversification and access to high-growth opportunities in tech and other sectors that tend to pay low or no […]
The Risk of Covered Calls: What You Need to Know Before Trading Options
Covered calls are one of the most popular options strategies for generating extra income. But while they’re less risky than other option strategies, they aren’t risk-free. It is critical to understand the risk of covered calls and the steps you can take to mitigate it before using them as part of your investment strategy. Let’s […]