I don’t like much risk. I like to mitigate risk, wherever I can. Boring, right? Well, not for me! Mitigating risk is a thrill in itself.
I have been paper trading a pretty conservative Covered Call strategy for about 8 months, and I’m loving the results!
Basically, I constructed a portfolio of well known value stocks with a solid history of dividend growth- all in multiples of 100 shares. I made sure all my positions were “Optionable,” as well!
I then sell the option at a strike price above my cost basis. The actual strike price depends on what I think would be a good return on that individual stock. I consider other factors, too!
But, my main focus is on the actual premium I receive from the sell of the option. That is all profit!
If the option is excercised, I’ll take both the option premium and proceeds from the sale of the stock! If the option isn’t exercised, I’ll just sell another call. Both are great by me!
And, maybe if I’m lucky, I’ll get a juicy dividend, too!
So far, my returns have been amazing- far greater than I expected 😊👌🏽
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