This is the Secret to Becoming a Successful Covered Call Option Writer
Wow! The stock market is certainly interesting these days. If you are like me you have certainly given up trying to predict which way the market is going to move. Thankfully, I've found myself in the position to be able to say "Who cares!"
This attitude is not due to the fact that I have essentially surrendered to the stock market and relegated my future to fate. I have made a monumental change in my investment strategy.
The world is full of people that fail to see the advantages to covered call writing. My favorite piece of advice I get from these so called market experts is that "covered call writing fails because the market takes away your winners and leaves you with the losers". I find this hilarious. If I enter a trade with the potential to earn 8% for the market calls my stock that means I locked in that gain. Who cares if the stock continues to rise in value, I just made 8% for the month!
In order to be successful using covered calls the average investor needs to remain focused on their goal. Forget about what might have been. It is easy to lose sight of why you entered into a trade to begin with and instead focus on the unforeseen benefits that you never received. Month after month of 2% to 10% gains will certainly make me more than the appreciation in value of a couple of stocks that ended up being called away. Keep focused on your goal which is to make money!
Now that we've addressed the fallacy about the market taking the winners, let's focus in on the losers. The real fact is that stocks decline at a faster rate than they go up. Fear and panic sometimes force people to act on emotion and not on logic. This is where the covered call option writer needs to protect himself. How is this done? The answer is beyond the scope of this article, but I will say that it can be done rather easily.
What if you can lock in those same gains while using a strategy to protect yourself if the market declines? Think about it, knowing exactly what your gain will be even before you place your trade. That, my friend, is taking control of your investments. The exciting fact is that you can do that reliably because I do that very thing month after month.
You must learn how to remain focused on your goal and protect the downside in order to be a successful covered call seller. The secret is in finding a proven strategy that will keep you on track regardless of which direction the stock market is moving in. Now you must make a decision. Do you want to be the kind of investor that continually searches for the next super stock? Or do you want to be the successful investor that reliably builds wealth and becomes rich by utilizing proven, low risk strategies to beat the market month after month?
I've made my decision. - 23222
This attitude is not due to the fact that I have essentially surrendered to the stock market and relegated my future to fate. I have made a monumental change in my investment strategy.
The world is full of people that fail to see the advantages to covered call writing. My favorite piece of advice I get from these so called market experts is that "covered call writing fails because the market takes away your winners and leaves you with the losers". I find this hilarious. If I enter a trade with the potential to earn 8% for the market calls my stock that means I locked in that gain. Who cares if the stock continues to rise in value, I just made 8% for the month!
In order to be successful using covered calls the average investor needs to remain focused on their goal. Forget about what might have been. It is easy to lose sight of why you entered into a trade to begin with and instead focus on the unforeseen benefits that you never received. Month after month of 2% to 10% gains will certainly make me more than the appreciation in value of a couple of stocks that ended up being called away. Keep focused on your goal which is to make money!
Now that we've addressed the fallacy about the market taking the winners, let's focus in on the losers. The real fact is that stocks decline at a faster rate than they go up. Fear and panic sometimes force people to act on emotion and not on logic. This is where the covered call option writer needs to protect himself. How is this done? The answer is beyond the scope of this article, but I will say that it can be done rather easily.
What if you can lock in those same gains while using a strategy to protect yourself if the market declines? Think about it, knowing exactly what your gain will be even before you place your trade. That, my friend, is taking control of your investments. The exciting fact is that you can do that reliably because I do that very thing month after month.
You must learn how to remain focused on your goal and protect the downside in order to be a successful covered call seller. The secret is in finding a proven strategy that will keep you on track regardless of which direction the stock market is moving in. Now you must make a decision. Do you want to be the kind of investor that continually searches for the next super stock? Or do you want to be the successful investor that reliably builds wealth and becomes rich by utilizing proven, low risk strategies to beat the market month after month?
I've made my decision. - 23222
About the Author:
Visit Marc's website for more information on how to successfully write Covered Calls in a declining stock market
posted by X - Men @ 3:10 AM
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