Theater Arts ? Blog Archive ? Investing Strategy: Covered Call ...

Experts in the field of investment believed that it is important to invest your hard earned dollars properly and in a secure manner. They believed that you money should work for you and for you to enjoy life. When talking about investment, many people who have money on their pockets aren?t that sure if it is worth their time and effort. Not everyone are fully aware how investments run your hard earned dollars. But according to experts, there are many kinds of investments that are worth the risk. One investment that many experts are very well aware of is covered call.

For someone who hasn?t heard covered call, they could think that this is like a direct calls to and from other countries. Well, this is not your ordinary telephones or all about making phone calls. Covered calls is one of the investment strategies that experts used. This investment won?t get you the idea of making big in just a short period of time. This is among the income oriented approach that focuses your money to progress slowly.

What are the things that you need in writing covered calls?

First and foremost you need to have a brokerage account. The next you that you should have is a permission that qualifies you to write a covered call. Many accounts will allow writing covered calls in default mode or there just complete an easy form so that you can write and sell call options. You also need to have at least 100 shares of stock or funds to buy one. Last but not the least is your portfolio and wide selection of quality trade options.

You need to familiarize with different terms like short and long. Long in this kind of investment means that you bought a particular share and you are entitled to receive some profit if the worth rises. Short is selling a share even if you don?t own it. Investors would short a share if they predict that the share will decrease and depreciate in value. In the long term, the investors will have to buy that share they sold for a lesser price. This is where investors get their income or profits in the long run.

Other terms that you need to remember is calls and puts. Call option is where the buyer of a share has the right to call any price or is sometimes called strike price of that particular share before the share expires. This kind of investment is simply the same as any other investment since it has its own risk and failures as well. It is important so that you can know the risk and know this investment better.

Source: http://www.cendresetsang-lefilm.com/uncategorized/investing-strategy-covered-call-things-you-need-to-know

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