Covered call writing (selling stock options against your portfolio holdings) is a time tested and conservative method to enhance portfolio yield and reduce the risk of owning the underlying stocks.

A consistently implemented covered call program also reduces portfolio volatility, so that quarter-to-quarter returns will be closer to the longer term average return than without covered option writing.

It’s a Hedging Strategy:

The method is a form of hedging with a long stock position and a short option.

There are basically two types of covered call hedges: one using out-of-the-money (OTM) calls, and the other using in-the-money (ITM) calls. There are also at-the-money (ATM) calls, but they are less likely to be used.

ITM calls have an exercise (strike) price when written that is below the market price of the underlying security — they have some “intrinsic value” as well as some intangible value.  OTM calls have a strike price when written that is above

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The Dow has been hit hard with selling, breaking through the key 11,600 support level I’ve been warning about. I said that once the Dow breaks 11,600, the bear is back in control and much lower prices are to come. That means U.S. stocks, and by default the U.S. economy, are going over the cliff. How low will it go? We need more fear in the market before a bottom comes and I see the Dow dropping to as low as 9,200 before a turnaround starts to take hold. Of course, it won't be a straight-down affair. There will be a lot of fake-out moves and with all the uncertainty out there, there will be a lot of volatility. The economic news is not good, and a lot of investors are very, very nervous, and rightfully so. What should you do? Be cautious. Stick ...

In the CNBC.com Video Roundup, “Volatility-Beaters: Steel and Internet Stocks”, what steel name did Timna Tanners pick?

“We like U.S. Steel (X)…They’re the biggest tubular pipe player in the U.S.  Prices are going to rise steadily with energy demand there.”

- Timna Tanners, UBS Steel & Building Materials Analyst

US Steel scores well for earnings momentum and price momentum in the models I follow.

I don't see any particular news today but Zhongpin (HOGS) is up over $13.00 this AM (+15%) so I am taking profits, and moving this position to just a "holding stake" (0.1% of fund). Earlier this week, they did put out a press release with some updates on their new processing plants. This is a very thinly traded issue with high volatility so I'm taking this 2 day spike as an opportunity to cull the position and will buy back sold shares on a pullback.Zhongpin Inc. (HOGS), a leading meat and food processing company in the People's Republic of China ("PRC"), today provided an update on the construction of its new prepared meat facility at Zhongpin's Industrial Park located in Changge City, Henan Province and its frozen and chilled pork processing facilities in western and eastern Henan Province.On March 12, 2008, Zhongpin began construction of ...

No one portfolio is suitable for all investors and no lifestyle or target date fund has a portfolio that is appropriate for all investors of the same age or projected retirement date. Building a portfolio that is tailored specifically to you is a better way to go.

Some Key Issues to Understand About Yourself:

When designing your own portfolio, you need to take into consideration at least these issues:

Your level of need for current income from your portfolio
Your tolerance for volatility based on requirements for capital withdrawals to pay for lifestyle or particular capital needs, such as college tuition
Your level of emotional tolerance for portfolio value fluctuation
Your ability to replace potential capital losses with earnings from work
Your other assets and sources or income, such as rents or pensions
Your ability, willingness, available time and self-discipline to research and manage your portfolio’s assets
The level of total return …

No one portfolio is suitable for all investors and no lifestyle or target date fund has a portfolio that is appropriate for all investors of the same age or projected retirement date. Building a portfolio that is tailored specifically to you is a better way to go.

Some Key Issues to Understand About Yourself:

When designing your own portfolio, you need to take into consideration at least these issues:

Your level of need for current income from your portfolio Your tolerance for volatility based on requirements for capital withdrawals to pay for lifestyle or particular capital needs, such as college tuition Your level of emotional tolerance for portfolio value fluctuation Your ability to replace potential capital losses with earnings from work Your other assets and sources or income, such as rents or pensions Your ability, willingness, available time and self-discipline to research and manage your portfolio’s assets The level of total return you seek and your time horizon ...

Pacific Growth Equities’ Analyst Yun Kim recommends Bankrate (RATE) based on the following: 1. Bankrate, Inc. and its subsidiaries own and operate an Internet-based consumer banking and personal finance network. Its Web site, Bankrate.com aggregates information on mortgages, credit cards, automobile loans, money market accounts, certificates of deposit, checking and ATM fees, home equity loans, and online banking fees.

2. The assumption that there will likely be a surge in demand for deposits this year as many major banks are looking to boost their deposits in anticipation of write-downs of bad credit-card debt and home-equity loans.

3. According to Kim, there currently isn’t much online infrastructure to support a surge in demand, and that there aren’t any established players in this area of consumer finance, except for Bankrate.

4. The expected strength in its deposits business can more than offset this volatility.

5. The stock currently trades at 13.2 times

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What to watch: Thursday, May 29: U.S. Revised Q1 GDP; Friday, May 30: CPI for April (May for select metropolitan areas); April - Industrial Production; April - Household income and expenditure survey; April - New housing starts; April - Unemployment and Ratio of Job Offers to Applicants Ongoing: Commodities and forex volatility — more inflation reporting chicanery. Protectionist tendencies may be pressured by a report (and the realization) of $3.2 billion in cross-shareholding losses in FY2007, as well as greater urgency from within for acceptance of foreign investment. In the meantime, we can enjoy watching the latest round of TCI (The Children’s Investment Fund (UK)) vs. J-Power (JP: 9513). Markets: The Nikkei starts the week against a shortened U.S. trading week for the Memorial Day holiday. Making matters worse is last Friday’s bout of selling that did ...

This screened ETF list is based on a combination of features that are often requested by more cautious equity investors:

funds with history and reasonable liquidity acceptable expense ratios for the type of portfolio not too much volatility for the return some current yield better total returns than bonds

The funds in the list are not recommendations. They are simply idea possibilities for do-it-yourself investors who may find the particular screening criteria useful.

The funds do not represent a full spread of the asset classes which we believe should be in a well designed portfolio.

The universe from which they were filtered is the entire database of hundreds of ETFs at www.IndexUniverse.com.

Important Note:

The fact that cautious investors ask the kinds of questions on which the filter is based, does not mean the funds that make it through the filter are conservative or necessarily good investments. In fact, some

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If you know what an iron condor is—which, if you’re reading this, you probably do—you also know that it isn’t the only options strategy out there. It’s worked very well for us, consistently providing close to 10% average monthly returns—but a lot of our subscribers have expressed an interest in, shall we say, a bit more variety. Sure, our bonus trades mix it up a little, but we thought it was time we started talking about other kinds of trades on a regular basis. That’s why we’re introducing Calendar Options. Condor’s Complement So what’s the best way to complement our iron condor positions? We like the idea of profiting no matter which direction the market takes from week to week, especially with so much economic uncertainty out there right now. So we’re going to stick with the delta-neutral theme for our ...