Everyone enjoys receiving dividends. Much like receiving interest payments, dividends are pure passive income. The best kind. You get paid no matter what you’re currently doing — reading a book, watching TV, on an airplane; it doesn’t matter, you still receive the dividend. There is another kind of investment that behaves the same way — covered calls.
Great Gamblers actually have a lot in common with great investors. They know excellent money management is the key to success. Their view is that as long as their money is on the table, it belongs to the game. Their Goal is often to get their own money off the table quickly, so they can play with the house’s money. In the investment world, a Covered call trading strategy is a good way to play with the house’s money. However, there are many different viewpoints. One is that you just find a good stock, and then if it trades options to just sell calls against it until the stock pays for itself. However this is a very limited viewpoint that doesn’t explain what a “good stock” is.
I am continually amazed that many retail investors simply don’t understand the concept of generating extra cash from their stock positions. People look at me like I am crazy when I tell them to utilize covered call options to generate extra income, decrease their exposure to market declines, and establish strict sell criteria. I was introduced to covered calls by several of my clients. They explained the concept to me. The technique of writing covered calls is the only stock option strategy that you can use at most of the major brokerage firms for your IRA investments. This is because writing covered calls is a very conservative strategy relative to other option strategies.
Do you want to get into foreign currency trading, but aren’t sure how it can benefit you? There are many advantages to foreign currency trading. First, in the last few years, the spread rates have tightened a lot. Most of the online FOREX brokers today will offer you a five pips spread on EUR/USD. This is the most widely traded currency pair.