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Incorrect Types of Underlying Stocks For Selling Covered Call Options |
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There are underlying
stocks from which
you need to stay
away when you are
selling covered
calls. The stocks
that move up and
down too often or
are too
volatile
are generally to be
avoided in
selling covered
calls.
When engaged in
selling covered
calls you want to
sell options for
stocks that are more
or less stable. The
kinds of assets that
surprise you often
are bad for this
option trading
strategy.
Furthermore, you
need to stay away
from options of
underlying stocks
that are being
traded in low
volumes. These
stocks do not pay
high
premiums,
the only source of
income when it comes
to selling covered
calls. |
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