Exchange-traded funds (“ETFs”) have opened the door to previously hard-to-reach corners of the global marketplace, making it easier and more cost effective for anyone with an online brokerage account to develop institutional-level strategies. Those willing to invest the time in understanding options have the opportunity to greatly expand their arsenal of tactics to include common equity option strategies like covered calls [see 101 ETF Lessons Every Financial Advisor Should Learn]. What Is a Covered Call? Covered calls are stock option agreements to provide shares that you own to a buyer at a pre-defined price and time in exchange for an upfront option premium payment. Since each options contract encompasses 100 shares, you must own more than 100 shares to use covered calls and must have even numbers of shares in order to cover your entire stock position. Meanwhile, the contract leaves you with an obligation to sell, and the buyer [...] Click here to read the original article on ETFdb.com. Related Posts: Daily ETF Roundup: Stocks Close Higher As Earnings Season Kicks Off ETF Bracket Madness: The Championship Daily ETF Roundup: Stocks Reverse Losses To Close Higher Daily ETF Roundup: Stocks Drop On Disappointing Labor Data Daily ETF Roundup: Stocks Rebound On Bank of Japan Move
Exchange-traded funds (“ETFs”) have opened the door to previously hard-to-reach corners of the global marketplace, making it easier and more cost effective for anyone with an online brokerage account to develop institutional-level strategies. Those willing to invest the time in understanding options have the opportunity to greatly expand their arsenal of tactics to include common equity option strategies like covered calls [see 101 ETF Lessons Every Financial Advisor Should Learn]. What Is a Covered Call? Covered calls are stock option agreements to provide shares that you own to a buyer at a pre-defined price and time in exchange for an upfront option premium payment. Since each options contract encompasses 100 shares, you must own more than 100 shares to use covered calls and must have even numbers of shares in order to cover your entire stock position. Meanwhile, the contract leaves you with an obligation to sell, and the buyer [...]
Click here to read the original article on ETFdb.com.
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