OTrader Stock and Option Portfolio Management Software » Covered Calls

Easy access to the most recent Covered call videos

Nik — Sun, 15 Feb 2009 08:39:14 +0000

If you are looking for videos on how to use OTrader with covered calls then go to the Covered Call Library. Each time we make a new covered call video I will upload it to this page.

How to Exercise or Assign Option Trades

Nik — Tue, 10 Feb 2009 08:01:02 +0000

Here is another video that shows what to do when you get assigned (exercised) on a short option trade or when an option trade expires worthless.

Rolling Up Option Strike Prices

Nik — Sat, 07 Feb 2009 07:55:49 +0000

I have had a few questions lately about to roll up or roll down covered calls. This quick video will show you how to roll up a covered call. You can use the same method to roll down as well.

Entering an Option Trade into OTrader

Nik — Thu, 20 Nov 2008 07:37:16 +0000

I just had a new user ask how to enter an option trade into OTrader so I made this video to show him (you) how it is done.

How to Enter a Covered Call into OTrader

Nik — Thu, 20 Nov 2008 07:36:09 +0000

This is a quick video I did while speaking to a client about entering covered call trades into OTrader.

It has not been edited or scripted just a straight out recording of your phone conversation.

As always if you have any questions let me know.

The benefits and features of writing Covered Calls

Nik — Thu, 20 Nov 2008 07:33:31 +0000

#1 Additional Income

Writing covered calls can provide you with an ongoing stream of income from the option premium. This is particularly important when stocks do not pay dividends or pay very small dividends.

The call option premium can also substantially increase total returns in flat or slower growth stock markets.

#2 Income paid up-front

The income from writing covered calls in credited to your account the next day, creating immediate cash flow that can be reinvested, withdrawn from cash management accounts or used to pay interest on margin loans.

Since the call option premium is paid up front it can be reinvested to enhance the total return of your portfolio.

#3 Predetermined Return

In a rising market, the immediate return from call writing can be evaluated prior to initiating the investment position. You will know what the call writing income will be and the maximum additional capital appreciation you may expect from your shares.

Covered Call Portfolio Management Software
The Trader’s alternative to MYOB, Quickbooks and Excel. Get your FREE 20 day trial of OTrader Investment Portfolio management software for stocks, options and warrants.

#4 Risk Reduction

If a stock declines in price,(Not that they ever do that…) the call writing income will help to offset some or all of the capital loss. Writing covered calls will provide some downside protection when stock decline in value.

#5 Cash Dividends

As a writer of covered calls you will continue to be entitled to cash dividends so long as you own the shares. Beware dividends can lead to early exercise though.

#6 Novation

Exchange-listed option contracts like shares, are interchangeable with another contract with exactly the same expire month and strike price. This is known as ‘novation’. This enables the covered call option to be initiated through a ’sell to open’ order, but also to close out the position if desired through a ‘buy to close’ order.

Got a question about covered calls? Let me know.