Monday, 18 September 2017

Covered call writing strategy- Coal India Ltd - Long Term Investment Ideas

Make Money Without selling your holdings.

Option sellers & Hedge Traders,Investors make monthly 5% to 10% .All are proper hedge trade...

covered call include generation of income without added market risk. The comparison between the covered call and simply owning shares of stock demonstrates that added covered call income discounts the basis in stock, thus reducing market risk.

What is a covered call?

A “covered call” is an income-producing strategy where you sell, or “write”, call options against shares of stock you already own. Typically, you’ll sell one contract for every 100 shares of stock. In exchange for selling the call options, you collect an option premium. But that premium comes with an obligation. If the call option you sold is exercised by the buyer, you may be obligated to deliver your shares of the underlying stock.

Fortunately, you already own the underlying stock, so your potential obligation is “covered” – hence this strategy’s name, “covered call” writing.

Coal India Limited