"Covered Calls" - Smart Investing Strategy When Markets Hit The Doldrums

This is a Sponsored post written by me on behalf of Born To Sell. All opinions are 100% mine.

There are times when the stock market hits the doldrums. Trading volume declines and share prices go sideways. These are times when investors become extremely edgy and impatient and start looking for other ways to beef up the earning potential of their investment portfolio. These are times when they are tempted to discard their buy-and-hold strategy! Times when they may even prematurely divest themselves of their under-performing stock holdings despite maintaining a neutral to moderately bullish outlook of the stock market. There is, however, a way of maximizing returns on investments when the market hits the doldrums! Known as 'covered calls', this option trading strategy allows investors to generate  additional income from their buy-and-hold portfolio during those times when the market goes sideways!
Covered call writing refers to either:

• The simultaneous purchase of stock and the sale of a call option (also known as buy-write);
• or, the sale of a call option against a stock currently held by an investor (also known as overwrite).

How It Works
This may seem a little complicated to many, but the strategy is really simple and straightforward!
At the same time that the investor buys or holds on to a particular stock, he writes a call option or an offer to sell these stocks at a price pre-determined price ( known as the 'strike price' which is usually above the current market price) with an expiration date set at sometime in the near future. Under this arrangement, the option seller will be obligated to sell his stocks to the option buyer when the current market price is above this strike price level. On the other hand, the option buyer agrees to pay the option seller a premium equivalent to the difference between the strike price and the market price of the stock when the call option was made. The option buyer, however, may or may not exercise his right to buy the shares of stocks when the market price is above the strike price. He (option buyer) is obligated to pay the option seller the premium during the duration of the call.
In short, the investor is paid to agree to sell his stock at the strike price. He retains all benefits of underlying stock ownership, such as dividends and voting rights until such time when he is assigned an exercise notice on the written call and is obligated to sell his shares. Should the market continue to move sideways until expiry, there will be no exercise notice written on the call and the investor may offer a new call option. What this means is that if the investor had used the covered call strategy repeatedly over time, he'd have earned a lot more income in addition to the dividends you got along the way.
Covered call is a conservative income-oriented stock investment strategy which you should seriously consider specially when the market stalls and moves sideways. It offers you an opportunity to earn more than what banks and bonds have to offer. Why settle for 1 to 3% APR as offered by traditional banking instruments when you can earn at least 1% per month on covered calls.
Learn how to do it now. Because it is also not without some downside risks, you must learn from the experts on covered calls. Visit Born To Sell Covered Calls  now and start earning extra from the stocks you already own! They offer a free covered call newsletter, free covered call tutorial, and free covered call blog.

Related articles

• Covered call options: A profitable tool in a stable market (theglobeandmail.com)
• Options Trading: Writing Covered Calls (engineeringincome.com)

High Yield Investment Opportunities You May Not Know About

 People invest for either of these two reasons:

• To preserve their wealth or retain the buying power of their hard earned savings;
• To accumulate wealth or grow their assets.

Whatever their reasons may be, they naturally are always in the look out for high yielding investments. By 
high yielding investments, we mean those that give a higher  percentage of return on their principal than what the banks' certificate of deposits or US treasuries can provide ... those that will more than offset the rate of inflation on their money.

Many of these investors understand that with higher yields come great amount of risks too (the fundamental principle of investment : the higher the risk, the greater the potential for gain)!

Included in this category of high yielding investments are stocks, forex, and commodity futures. These are investments where you may achieve a substantial appreciation in the value of your initial capital over a short period of time. The bad side here is, you may also lose most, if not all of  your money over the same short period of time! This is the reason why seasoned traders would limit their placements on these high yield-high risk instruments to no more than 15% of  their total portfolio value.

With uncertainties continuing to becloud our economy, we are once more seeing an exodus of investors out of the stock markets and into the safest money investments they can find to shelter what’s left of their lifetime savings until the economy stabilizes. These are the investors who want to know the answer to one common question -  

“Is there a legitimate high yield investment with low risk for my money?”

Pope Paul VI's Humanae Vitae And The Need To Control Population Growth

With the earth's population growing by 95 million a year, the world is trudging towards overpopulation and may result into the rapid depletion of the planet's resources. This in turn may lead to widespread famine, global warming, acid rain, and other major ecological problems. 

(Global warming, acid rain, depletion of the ozone layer, vulnerability to epidemics, and exhaustion of soils and ground-water are all, as have been proven by numerous scientific studies, related to population size).

 

We have today, arrived at the crossroads of survival for a livable life over the entire world. One road leads to the continued depletion of resources, pollution and reduction of the ability to meet basic human needs. The other leads to an improved way of life where population sizes are in balance with the sustainable supply of resources. We need to realize and accept the fact that we have reached the point where our population is rapidly increasing while our basic natural resources are declining essentially because many of our renewable resources are being used faster than they can restore themselves. 


The concept of sustainable development subscribes to the principle of living within the carrying capacity of the environment. Unfortunately, as in the case of all less developed countries, sustainability is hardly possible since the birth rates in these countries far exceeds their GDP growth. There is therefore an urgency to implement population control programs specially in these less developed countries!

Artificial birth control, or the use of contraceptives, is the easiest way to address the population problem. Unfortunately, efforts to implement  any population control program that promotes the use of contraceptives is being met with stern disapproval from the catholic church. (In the Philippines, the newly installed president who is a staunch advocate of population control, was even threatened with ex-communication by some  catholic bishops for supporting the Reproductive Health Bill now pending in the Philippine Congress!)

At the center of the catholic church's unwavering stance against artificial birth control is the

Humanae Vitae (Latin for "Of Human Life")  - an encyclical written by Pope Paul VI and promulgated on July 25, 1968. Subtitled "On the Regulation of Birth", it re-affirms the traditional teaching of the Catholic Church regarding abortion, contraception, and other issues pertaining to human life. The encyclical totally banned all forms of contraceptives!

Although Pope Paul VI,  when he wrote this encyclical, did not invoke the doctrine of "Papal Infallibility" (the dogma in Roman Catholic theology that, by action of the Holy Spirit, the Pope is preserved from even the possibility of error when he solemnly declares or promulgates to the universal Church a dogmatic teaching on faith or morals as being contained in divine revelation, or at least being intimately connected to divine revelation.), it was none-the-less embraced by the catholic bishops worldwide as if it was gospel truth believing the pope was preaching "ex-cathedra".  Thus, the encyclical was the subject of debates and controversies from then on up to the present!

PLASTIC...PLASTIC...PLASTIC EVERYWHERE

Everywhere you go today, you see plastic litter spoiling the scenery, choking drains. In some countries like the Philippines where waste materials are burned first to reduce the volume for the land fill. This results in serious air pollution and emission of toxic gasses.
It has been more than half a century now since plastic was invented and became very much a part of our daily existence. But, amazingly, it is only now that we are realizing the devastating residual effect of our dependence on plastic products - THE PROBLEM RELATED TO THE DISPOSAL OF WASTE PLASTIC PRODUCTS!
Plastic is a relatively cheap, durable, and versatile material. Resistant to moisture, chemicals, and decay, it has found many uses and have replaced many materials in existing products! Almost 100 million metric tonnes of plastic are produced each year and more than 1/3 of these (40%) are used for packaging and wrapping.
Unfortunately, plastic is non-biodegradable and poses a serious threat to waste management. It should not be allowed to go into landfills. Burning plastic wastes will bring more disastrous effects to the environment and is definitely out of the question! Recycling plastic has remained to be the most practical solution to get rid of plastic wastes, but this too is turning out to be more of a myth!
Recyclers falsely claim that curb side (kerbside) collected plastic wastes are actually reprocessed into new plastic bags and containers. Truth is only virgin plastics (or virgin polymers) are actually used in the manufacture of new plastic bags and containers while the curb side collected plastic wastes are turned into other end products such as traffic signs and road warning devices, fleece clothing, playground equipment, and other building materials. (The contamination level of recycled plastic is simply too high for the recyclate to be used again for food grade packaging purposes.) Recycling will not solve our plastic waste problem and we will really see no end to the onslaught of plastic materials into our environment as long as manufacturers continue unabated in producing more plastic bags and containers daily.

ONLINE INVESTING – DON’T JUST TAKE THE PLUNGE!

Investing online is a matter of choice ...and, of course, of convenience too!

The lure of trying one's hands on investing is simply irresistible! This is why we see a lot of first time investors trying it incognito via online brokers. Newbies who had always wanted to test their skills at handling their own investments are often the ones easily attracted
to online investing. Most of whom are individuals who have suddenly acquired some excess capital from a booming start-up business undertaking, or a blooming professional career. These people find online investing to be a "perfect fit" for their "dreamed fantasy". Well, why not? Not only does online investing allow them to manage their own investments in the comforts and confidentiality of their own abodes, it is also quick and easy (so it seems) to learn! With their first click on the mouse, newbies immediately experience an exhilarating transformation into their fancied and fantasized role of becoming a real stock or forex traders in that instant; executing orders at will while experiencing the thrill of pitting their own raw trading skills against seasoned money/stock traders online. With hundreds of sites offering free tutorial services, seminars, and e-books, plus a free live demo account to boot, online forex/stock trading is really catching fire with this lot of trader-wanna-bees! But, alas, these "George Soros Wannabees" should not fool themselves into believing that online investing (especially forex with its sometimes wild and wide price fluctuations) will be like "picking apples" all the time.

Hedging- A Necessary Tool For Developing CountriesTo Stabilize Oil Prices

Developing countries like the Philippines have been hit hard by surging oil prices since the 70's and have hardly recovered from the successive oil price shocks since then. The most recent steep rise of crude oil prices forebodes of another similar scenario comparable to the 70's and the 80's.The Business Monitor International in its report entitled 'Philippine Oil and Gas Report Q4 2010' predicted a 2010 OPEC basket oil price level of US$83.00/bbl. It currently stands at US$73.00/bbl! If nothing is done to cushion the effect of the expected future oil price surges, this will definitely bring down the developing countries to their knees!

So, what can done to avert such risks? These countries are so dependent on imported oil to keep their economies going. Through various ways and means, the governments of these developing countries tried to cushion the effects of the crude oil price surges in the past by legislating measures and/or imposing new taxes - in the end, ultimately passing the buck to their citizens. But, how much of these price increases can they take before they rise up in revolt!

Demystifying the Candlestick Myth

For forex traders, stock traders, commodity futures traders, bond traders!

Since Steve Nison came up with his first book "Japanese Candlestick Charting Techniques" in 1991, forex traders stock traders, commodity futures traders all over the world have been awed and mystified by this centuries old charting tool! The ensuing interest for, and the widespread popularity of this trading tool was simply magical. Every Tom, Dick, and Harry dealing with any form of trading was scrambling for whatever available Candlestick tutorials, books, and lessons there are! Practically everyone in the investment industry was mesmerized by the simplicity and the seemingly promising trading results Candlestick will bring to its users!

It is a well accepted fact that the Japanese are regarded as one of the most efficient money managers and smartest trading partners in the world. The introduction/revelation of their purportedly 'secret' trading tools to the rest of the world would naturally lend an air of mysticism to the event!

But everyone wonders if the Japanese Candlestick Charting Technique is really a well-kept secret intentionally hidden from the rest of the world for centuries!?....Until, Steve Nison accidentally discovered it in the '90's!?

My answer is a categorical no! No, the Japanese Candlestick Chart was not a well-kept secret! Let us start uncovering the truth behind the mysteries and mysticism that shrouds Candlesticks by looking back at Japan's history.