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10 Top Tips for Covered Call Writers

Buy-write option investors should follow these simple rules

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Trader Hands


10 Buy-Write Rules to Follow

Investors using the covered call option trading strategy own the underlying stock and sell one call option for every 100 shares held. The option premium garnered can be a nice addition to any gains realized in the stock. This strategy is referred to as a buy-write when the investor buys the stock and sells, or writes, the option in a simultaneous trade. The strategy has proven to be a smart way to gain income on your stock positions. To that end here are a few tips to help improve your call-selling results.

Note: these tips are mostly aimed at people who buy stock for the purpose of writing call options.

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