is covered call riskless?

[Kenneth Roberts]

I like writing calls on broad based inexes to try to lessen the possibility of rapid drops or increases.

 

[RPEX]

Simple

Any good options book tells you this is a synthetic short put.

If you wanted to short put it (but you have existing stock) then that's fine.

Obviously however you look at it, it is not riskless.

 

[peterevanson]

Covered call writing is considered to be one of the most conservative uses of options, it's surely not without the risk. But the most important question is that how do one generate income more consistently from covered call trading? I believe in some terms that choose a high quality company, write in the money calls, use basic technical analysis and some more which should be improve investor's selection process. The very idea of ]option trading Australia for a living is appealing in itself. Like anything worthwhile in life, option trading for a living requires a number of essential things. This plan should include a minimum gain per successful trade and a maximum loss per losing trade.

 

[BobbyBB]

Yep, you're right about the weekend covered call courses. The concept of covered calls has been a great marketing gimmick for many.

Learn to realise when you're playing, or being played...Do that and you've got a great chance of success in this business because it's full of traps, tricks, deviousness, paint taping etc.

 

[A Dashing Blade]

is that true??

Not if your broker is holding the stock (in your name) for you or if your stock is held within your margin account.