We had a great session on 10 February – where we went over the theory and practice of doing a covered call. For those of you who have not seen the covered call strategy of the week yet – check out the strategy of the week on 5 February 2016 in VectorVest University (you can access this by clicking on training and then scrolling down to VectorVest University withing the VectorVest 7 platform).
The Q&A session went over the theory discussed in the Strategy of the Week on 5 February – and then I applied the theory to both Australian and USA stocks. The key items covered in this recording:
- The use of Options Analyser along with UniSearch to identify covered calls
- The selection of stock criteria to select large market cap companies
- How to find the best paying options premiums
- The discussion of naked puts (don’t let the name scare you – you get paid to wait for an optionable stock of your choosing at a price you are comfortable buying it at!)
- How to turn a covered call into a collar (using the juicy premium that you identified on the call to pay for the put to provide downside risk). Keep a lookout for the strategy of the week coming up – the collar option will be discussed.
In addition, in the webcast I noted the recent introductory options webinar I ran the other day – where I invited those who are interested to attend further detailed training (which entails a cost). I’ll post the details in my next blog post.
My final note is – don’t be afraid of options! Understand them and apply them in a structured and smart way to enhance your investing. As with myself – having only recently mastered the basics of options – my only regret is that I did not know about them sooner. I was always put off by the typical responses of “they are risky” and “too dangerous”. In the basics options course – we will show you why such statements are not true if you use them as we teach.