Options & Covered Calls

[stockman]

Is there anywhere that you can trade these online??

Does anyone use covered calls here as part of their investment strategy?

 

[wayneL]

Is there anywhere that you can trade these online??

Does anyone use covered calls here as part of their investment strategy?

You can trade them online through www.sanford.com.au or just about any US online broker if you want to trade there.

Regarding CC's as a strategy, there is a whole thread here:

https://www.aussiestockforums.com/forums/showthread.php?t=674

Contrary to what some seminar clowns teach, they are a lousy strategy to intitiate for the sake of it. There are strategies that are 1,000,000% better.

They do, however, have their use...under the following conditions they make good sense.

1/ You already own the stock.

2/ Your short term view is that the share price will go sideways or down

3/ You don't want to sell the stock, even if it does go down (short term)

4/ Premiums are high enough to warrant the risk of your shares being called in a sudden up move. (bearing in mind you don't want to sell)...or having to defend against you being called.

 

[money tree]

I went to a Peter Spann seminar other day, he was quoting 50-80% and reckons ASX is the one bragging about it.......we shook our heads in disbelief

 

[wayneL]

I went to a Peter Spann seminar other day, he was quoting 50-80% and reckons ASX is the one bragging about it.......we shook our heads in disbelief

It's got me buggered how they get away with it. I 'spose the ASX benefits from all the churn.

 

[money tree]

wanna know the real funny part?

as his example, he used BHP

gee. you would have only been exercised about 12/12 times and given away about $8 cap gains.....

not to mention your cashflow would have dried up after 1 or 2 months.....meaning you would be forced to sell the stock

 

[wayneL]

I wonder why he didn't use Elan as his example!:grenade: