Covered Call Ideas:
The purpose of covered calls is to slowly collect income on stocks by lowering one’s average cost. It is a good way to put on a bullish bet while minimizing your risk. While it does limit your potential reward, this tool can come in handy for those wanting to invest in a stock but on a pullback rather than at current prices. The names each month will most likely change. However, should I be forced to hold onto the stock past expiration because the covered call expired OTM, I would be comfortable doing so. In turn, I am only choosing names I feel confident about long-term. While there are many names with very attractive premium selling opportunities, especially high-beta tech names, most I would not be comfortable holding long-term as I think valuations are stretched. Below are 5 covered call trades that I like for the next month.
