Buying several different stocks to sell an overlay call can be a good thing or a bad thing. All the basic principles of buying stocks still apply, so please choose your position carefully.
So what stocks are good candidates for making phone calls?
1. Good Long Play
If you intend to sell guaranteed calls, you have to do stock, you do not mind holding a longer time frame as you may need. These stocks should have good fundamentals and become sustainable companies.
2. Cheap Stocks
When it comes to receiving calls, cheap stocks may have a higher possible return. If you sell $ 2 in a $ 50 stock, only 4%. If you sell $ 2 on $ 10 stock, you get a 20% return. Just remember this is not the most important thing to look at. High quality stocks are better.
3. Stock Trends Up or Side
The last thing I want to do is buy a stock that sells as the intention drops. If the stock falls, it is likely to continue to fall, why would you buy something like that.
Any stock that I purchased with the intention of making a cover call I like to see it start trending higher or at least the trend
. It should have the option
This goes without saying, but if you want to sell the phone on the stock, it needs to be optional. not all
Stock has the option. If the stock does not have many volumes, it may not have options. There are a number of other reasons why stocks may not have options, so it is worthwhile to study