Message Font: Serif | Sans-Serif
No. of Recommendations: 1
I would appreciate hearing from Fools who can direct me to information about a relatively conservative strategy of selling covered calls on specific stocks, or uncovered calls on the Utility Index. When attempting to generate income while protecting gains, is it better to sell out of the money calls, deep in the money calls or a blend?

I've got news for you, friend, selling uncovered calls is not a relatively conservative strategy. That's one way to get rid of your father's capital, though, if that's your intent.

Selling deep in the money calls is guaranteed to call away the stock, and since you don't want to sell the stock, I wouldn't use that strategy. Likewise, at the money calls risks losing the stock. Out of the money calls on utilities might not produce much income at all. So, basically, I'd say forget about using an options selling strategy.
Print the post  


When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.