How Do You Write A Covered Call Option (Go Short)?
If you want to get small but steady profit from your stock holdings, consider writing covered CALL options against them. As an option writer, your profit potential is limited and risk is theoreticaly unlimited but since you are covered with your stock position it amounts to loss of opportunity (to sell your stocks at a higher price). The worst thing it can happen is that your get assigned exercise and your stocks get “called away” from you at a pre-arranged strike price (that you picked) while at the same time in the market your stock would be worth much more. Ask your online brokerage service if you can write covered calls against your stock positions. If they do not offer this service, find a brokerage service that does and transfer your stocks there Find out which of your stocks are optionable. Usualy all the major large cap stocks are. You’ll have to have 100 shares for each option you write. Decide what strike price you want to write your calls at. You will be safer with high out-
