Covered Calls, Dividends & Passive Income

In an effort to generate additional cash flow from some of the stock I own, I decided to try writing a covered call. I have been doing some reading on the subject and it is a good way to earn addition income on stocks especially in a stagnant market such as this. I’ve looked for some other Blogs on the subject, but I really couldn’t find any that went in-depth. There were some good articles, but most Blogs just kept track of their writer’s investments without telling you the rationale behind why they decided to write that particular covered call for that stock. I will try to be more detailed in my writing.

The other sites are all pay services trying to sell you their software or a list of companies with a high options premium. I have not subscribed to any of these services and typically don’t. If so some reason I do I will be sure to cover my experience here. I am a firm believer that unless what they are selling is a unique software program you can find most of the same information in books or for free on the Internet.

For any one interested here are some other websites that provide good basic information on what a covered call is and some basic strategies.

• One of the first places I go as sort of a jumping off point is Wikipedia. Why you ask? Generally speaking the information on their site is free from advertisements.It makes it easier to separate real information from someone sales pitch and it sites references and provides links to other reputable sources. So here is what Wikipedia has to say about Covered Calls.

• The Chicago Board Options Exchange (CBOE) is another site I like. Tons of information and you can register for free. Here are two links on CBOEs site woth checking out: CBOE’s Buy-Write Index and CBOE’s Covered Call Strategy

• I also like The Options Industry Council. There are online courses you can take for free. Lots of information and a great place to start.