by Maclin Vestor

A covered call strategy within a cycle will require people to sell options against the stock. If the stock is above the strike price, the stock will be “called” away. The seller receives the premium, but the owner of the call receives the shares at the strike price. There are various strategies involving this covered call strategy.

Some people prefer to have the covered call eventually pay back the stock owner his investment, so that he or she can reinvest that money, and upon receiving the investment back, the person will let the stock run. If this is the strategy, ideally you want to sell covered calls as the stock falls, as it stays flat, and then you want to have your cash back and let the stock run when it is on its way up again. This can allow you to buy an out of favor …

by Jordan Weir

Most traders view stock options as only a short term tool. The idea of a highly leveraged bet with the potential to make big bucks quickly appeals to the gambler inside all of us. Just like a card counting black-jack player, options can be used to make significant short term profits, provided the user is careful, and knows what they’re doing. But while options are usually employed solely by that clique of high-risk, high-reward traders, they actually have enormous benefits that tend to go unnoticed by many a long term investor.

The strategy I’m about to unveil isnt often used. Indeed, I’ve only briefly heard mention of them on little known websites, and even then, not in enough detail to give an example. So here it is, what I believe may be the best kept secret from long term investors on main street. The stock option …