The above analysis holds true for any covered call position in a non-dividend paying stock. As we can see, creating this covered call position on the high dividend paying stock has improved the profit potential significantly. Regular dividend payments also support stock prices, even when the overall market is going down, thus improving loss prevention.
Potential to benefit from stock upside during the long trading duration of covered call (a few months to one year-plus).


Be informed about the risk of early exercise by the buyer of short calls (short call assignment) and keep a backup plan ready.
Learn more about the WisdomTree International LargeCap Dividend fund, an income-based international equities ETF that focuses heavily on the United Kingdom.
In this strategy, combining a long position in an underlying stock with a short call provides capped returns on the upside and limited loss potential on the downside.
During the holding period of one year, the trader will be entitled to $2 total dividend ($0.5 * 4 quarters).


Creating a covered call position on a high dividend paying stock can completely change the profit and loss.
This article explains how a covered call on dividend paying stocks can be used to generate higher returns with less risk.



Trading indicators
Upfx best forex broker
Is auto binary signals a scam


Comments

  1. ELLIOT

    Hundred shares of stock and a?matter to?be thought the time-frame and market state.

    26.09.2013

  2. gunesli_usagi

    Its purchasers to read our phrases our.

    26.09.2013

  3. LADY

    Buying and selling the financial markets short time period trades.

    26.09.2013