Covered Calls vs. Just Holding Stocks

Covered calls are a great way to increase your return in the stock market. Some of these slow moving stocks are better for selling calls on then just holding the stock. Here are 4 reasons why selling covered calls can be a better alternative then to just keeping your stock and hoping it pays off in the end. nn1. Allows you to make extra MoneynnSelling calls allows you to make extra money in the stock market. This extra cash flow often times can be many times greater than something like dividends or the appreciation of the stock. nnWho does not love getting extra money each month from your investments? If you use them correctly they can be a big help.nn2. When The Markets Are Heading DownnnStocks do not just take a steady upward pace; they move both up and down. If you own a stock and do nothing you can lose a lot of money during a bears market. However by selling calls on your stock as it falls you can at least make back some of the money you lose during a bear market.nnThis can help you regain some of your losses without having to worry about the market turning around to do so.nn3. Sometimes Stocks Do Not Make Big MovesnnSometimes stocks can stay range bound for months, or even years without making a big move in any direction. Instead of just holding them through that and hoping that eventually the stock will head up, you can make money off those positions today by selling calls on them.nn4. Calls Can Add UpnnIf you hold a stock for a long time and keep selling calls on it, without getting called out, you might actually reach a point where you have made back what you originally paid for the stock in premium. Situations like this while they are rare can actually happen, and can lead to a paid off security that is just producing you a monthly income. nnFor more on Covered Calls visit http://www.stocks-simplified.com/covered_calls.html nnFor Some times to Avoid Selling Covered Calls visit http://www.stocks-simplified.com/Selling_covered_calls.html