One category of stocks that I like to sell covered calls against is Internet stocks — that is, companies that are in the e-commerce arena.
There are plenty of reasons to like Internet stocks broadly, but I like that these companies tend to have robust cash flow, which places them in great position to survive economic and market crashes. Cash flow often results in cash being added to the company’s own cash hoard, buttressing it for hard times.
Thus, outright owning these Internet stocks themselves is a good idea; I like all of the companies I’m about to talk about for their long-term potential.
However, I also like the idea of selling calls against half or more of a position because they also tend to have enough volatility that they offer juicy premiums. You are often able to get more than 2% for a four- to six-week holding period, which is generally a target I like to hit when selling covered calls.
Without further ado, then, here are the picks for covered calls: