Search Results
How to Find the Right Stocks for Covered Calls
Covered calls are a great way to generate extra income in your portfolio. However, while the strategy is pretty straightforward, questions quickly arise when beginners start to implement it. The first question is usually, “how do you choose the right stocks for covered calls?” Of course, the answer ultimately depends on your goals and market […]
How to Get Approved for Option Trading
Options have become a popular way to speculate, hedge against risk, and even generate income. If you’re interested in trading options, you must apply for special permission from your brokerage. They will then assign an options level that they feel is appropriate based on your account, education, history, and other factors. Let’s look at the […]
How to Choose the Right Covered Call Expirations
Covered calls are a popular strategy for generating income from a portfolio of stocks. While the strategy may seem straightforward, investors must decide between various strike prices and expiration dates that influence the risk of selling stock, as well as premium income and capital gains. In this article, we will take a look at how […]
Bond Ladders vs. Bond Funds: What’s Right for You?
Many retirement investors are interested in bonds because they are both safer and more predictable than the stock market. Bonds pay out interest payments on a regular basis, and if held to maturity, repay the principal amount. If you’re holding highly rated bonds, the default risk is minimal compared to equities. They are ideal for […]
The Impact of Dividends on Covered Calls
More than 80 percent of large-cap companies in the S&P 500 index pay dividends, along with about 70 percent of mid-cap companies and just over half of small-cap companies. Many retirees rely on dividend income to fund their retirement without selling stock. Since covered call strategies are a great way to enhance the income from […]
Weekly vs. Monthly Covered Calls
Covered calls are a great low-risk strategy to generate an income from an existing equity portfolio. By selling call options against an existing equity position, protect your downside some if the price of the stock declines. The strategy enables you to generate an income above and beyond equity dividends. The two most common questions that […]
How to Find Stocks with High Option Premiums
Stock options provide traders and investors with a lot of flexibility when leveraging returns or generating income. While there are many different strategies, success often boils down to a consistent, risk-managed approach. Option sellers must consider the balance between high volatility and stock ownership to create a portfolio that meets their income needs. Let’s look […]
Dividends Play a Big Part in Performance
Many investors fail to appreciate the substantial impact that dividends have on stock performance over time. According to Hartford Funds, more than 80 percent of the total return of the S&P 500 index between 1960 and 2016 is attributed to the compounding of reinvested dividends. The same study found that companies that grew or initiated dividends […]
When Should You Roll a Covered Call?
Covered call options are often pitched as a low-risk way to generate an income on a long-term stock position. While you boost income with a covered call, there can be a high opportunity cost if the underlying stock moves sharply higher and you’re forced to sell early. Deciding to roll a covered call is a common way […]
5 Mistakes to Avoid When Selling Covered Calls
Here is a harsh truth: Not all investors succeed at creating a profitable portfolio. Sometimes this is due to the unpredictability in the market or various other factors, but more often new investors fail because they lack a solid investment strategy. In short, they don’t know how to navigate the pitfalls of the market. One […]
Generate an Income from Credit Spreads
Income investing is popular among investors in or approaching retirement, but there are few good choices during periods of record-low interest rates. Exchange-traded options provide an easy way to generate extra income in a portfolio with limited risk. While covered calls are the most popular income strategy for options, credit spreads have become a popular […]
The Number One Job of Your Portfolio
In our continuation of the discussion of Snider Advisors’ Guiding Principles, we will examine the principle that the number one job of your portfolio is to produce a paycheck. ERISA Changed Everything While many of us were still too young to know why we should care, the rules of retirement changed significantly. When Congress passed the […]