Covered options are options you have shorted and where you own a corresponding amount of underlying stock.
The opposite of 'covered' options is 'uncovered', which is sometimes called 'naked'.
Selling naked options can be very risky due to uncapped liability.
Selling covered options, on the other hand, is very conservative.
So far, the worst that can happen is when the stock shoots way up.
In this case, you will be forced to sell your shares for the strike price per share.
Not such a bad outcome; you've still make money, just not as much as you could have.
Covered calls are both the most popular and most conservative of all options-based strategies.
The popularity comes because of the simplicity and the reliability to generate recurring monthly income.
Since you already own the underlying stock, why not sell covered options against those shares every month to get some extra income? Many investors do, and it is a very good way to earn money.
There are a lot of different websites that offer their customers options trading and stocks investing services.
Some people can really benefit from that if they are investing professionals or if they need to invest for their retirement.
But, since there are many different sites that offer investment options trading services, then you need to be sure you try to find the website that can offer you the most valuable service.
In order to do that, you need to check the customer ratings and the rates to use their services among all the websites.
When you compare the ratings, you need to be sure that you only take the highly rated companies into consideration.
You need to read the reviews as well so you can see what the customers are saying about it.
Then, you can compare the rates for all of those sites, and that will make it much easier for you to figure out which one is the most valuable.
A lot of people are into investing these days.
It is seen as a good way to generate extra cash and if people are careful with it, it can be a great way to get a solid source of income.
Some investing techniques offer a more secure way of generating cash while others offer riskier techniques.
There are many options to choose from but investors should be careful to not put all their eggs in one basket.
A good thumb rule for investing is to make some investments that are secure that will most likely pay off and then make some investments that are riskier but offer a greater reward.
A safe investment to make is the deep in the money covered calls.
They are used by investors to generate a monthly income.
They are used for this because they are generally more secure and are thus able to always offer a monthly income.