I'm looking for the option strategy that has proven to be the most consistently profitable. I want to understand which approach provides the most reliable returns in the options market.
7 answers
Sara
Sun Oct 13 2024
Benefits of Selling Covered Calls. One of the primary advantages is earning income through the premium received. Additionally, if the stock's price remains below the strike price, the investor retains their shares and keeps the premium as profit.
henry_miller_astronomer
Sun Oct 13 2024
Risks Involved. While the potential for profit exists, there are also risks. If the stock's price surpasses the strike price, the investor may be forced to sell their shares at a lower price than the current market value, thereby limiting potential gains.
KimchiQueenCharmingKissWarmth
Sun Oct 13 2024
Selling Covered Calls: A Premier Options Trading Tactic. This strategy involves committing to sell 100 shares of a stock at a predetermined strike price, either on or prior to the expiration date. By undertaking this obligation, traders are rewarded with a premium.
Andrea
Sun Oct 13 2024
Suitability for Investors. Selling covered calls is generally considered a conservative strategy, ideal for investors with a long-term outlook and a willingness to forgo potential upside gains in exchange for a guaranteed income.
Michele
Sun Oct 13 2024
Understanding the Mechanics. A covered call is executed when an investor owns shares of a particular stock and decides to sell the right, but not the obligation, to sell those shares at a specific price and time. This action is known as "writing" or "selling" a covered call.