Tag: options

Selling aggressive covered call options (i.e. aligning the strike price at or near the current price) to generate current income may augment overall portfolio returns while mitigating risk. In brief, options are a form of derivative trading that traders can utilize in order to initiate a short or long position via the sale or purchase of contacts. In the event of a covered call, this is accomplished by leveraging the shares one currently owns by selling a call contact against those shares for a premium. An option is a contract that gives the buyer of the contract the right, but not the obligation, to buy or sell an underlying security at a specified price on or before a specified date. The seller has the obligation to buy or sell the underlying security if the buyer exercises the option. An option that gives the owner the right to buy the security at a specific price is referred to as a call (bullish); an option that gives the right of the owner to sell the security at a specific price is referred to as a put (bearish). I will provide an overview of how an aggressive covered call is utilized and executed to generate current income and mitigate risk. Further details focusing on actual examples of selling in-the-money covered calls and the ability to sell these types of options in an aggressive manner to generate cash in one’s portfolio will follow. Continue reading "Aggressive Covered Call Options Strategy To Generate Current Income" →