Update on SDS Buy-Write Strategy Covered Calls

Overview I entered a buy-write strategy covered calls with SDS, ProShares UltraShort S&P500, on 4/12/2012. The ETF was purchased at $10 a share. The covered call was written at $0.55 per contract. The cost basis of the stock was $9.45. What Happened It was not a good trade. SP 500 closed at 4127 on 4/12/2021.… Continue reading Update on SDS Buy-Write Strategy Covered Calls

Build a Portfolio with Dividend-Paying Stocks and Covered Calls to Maximize Returns – Part 2

Benefits of Covered Call Writing Covered calls writing generates returns in three ways: The call writer collects the premium up front. The covered call writer earns any dividends paid on the call-covered stock. The call writer may realize the gain when the underlying stock price goes up. For example, AT&T is trading at $35.  The… Continue reading Build a Portfolio with Dividend-Paying Stocks and Covered Calls to Maximize Returns – Part 2

Build a Portfolio with Dividend-Paying Stocks and Covered Calls to Maximize Returns – Part 1

Dividend Stocks Stock dividends are a great way to increase earnings in a low interest rate environment.  Combined with the covered call writing strategy, we can increase our returns on investment and minimize the downside risks at the same time. If you don’t need the income from dividends now, you can opt in to take part… Continue reading Build a Portfolio with Dividend-Paying Stocks and Covered Calls to Maximize Returns – Part 1