Covered Calls During Volatile Times

Covered calls can be a great way to profit when the stock market is trending sideways. If you don’t know which way stocks are going to go it isn’t a bad idea to sell some calls on strong stocks. nnSome reasons Selling Covered Calls can be a good idea are.nn1. Monthly IncomennSelling calls is a nice way to make a monthly income from the stock market. If you are a dividend investor a 2-5% cash flow after a year might seem good enough. Forget about dividends covered calls can normally produce a profit of 2-5% a month if you do it right. nn2. Non TrendingnnThere is no need to look for a trending stock and attempt to ride it all the way up. Selling covered calls allows you to profit from the stock market even if it is not making new highs. The only thing you need is for the stock not to move ndown too much.nn3. There are good long term investmentsnnThere are always good investments in the stock market that you can afford to buy and hold for a few years. Why not buy a strong ETF and sell few calls on the stock while it is going through a sideways trend.nn4. If the markets recover you will be in a good position nnIf you buy some strong stocks to sell calls on and then the market starts making new highs, well you are going to be in a spot where you own a stock and the markets are going up. You can always stop selling calls on it and just enjoy the benefits of a rising market. nnOf course if the markets start heading down you can stand to lose a lot so it might be wise to have some point where you are going to limit your losses if you are wrong. nnFor more on covered calls visit http://www.stocks-simplified.com/covered_calls.html nnFor more on the stock market visit http://www.stocks-simplified.com