It’s fun to hunt through my favorite stocks, looking for volatility that generates the kind of covered call options premiums that will get me a solid block of income.
Namely, $1,000 in premiums, all using options just a month or so out.
The best part of these covered calls (in my humble opinion) is that I only look at stocks I would buy for the long term, and would be happy to hold even if the options get assigned.
Even if you don’t like these particular trades, always remember that if you’re looking to generate premium via covered calls, you want to target stocks you consider to be “forever holds” — stocks you would hold for 30 years or more. These stocks should be from companies with solid businesses and fundamentals, and that have long-term growth potential. At the same time, these stocks need to experience some volatility.
But if you’d like a few suggestions on making income via covered calls, read on.