The covered call is a strategy in options trading whereby call options are sold against a holding of the underlying common stock.
Using the covered call option strategy, the investor gets to earn a premium writing calls while at the same time appreciate all benefits of underlying stock ownership, such as dividends and voting rights, unless [...]
One of things that worries me about the current market is the unusually low reading in the CBOE Put/Call Ratio (CPC). The red line in Chart 1 is a 5-day moving average of the CPC which smoothes out its daily trend. The put/call ratio is a contrary indicator. In other words, a high put/call ratio [...]
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What is an option?
An option contract gives the buyer the right, but not the obligation to buy/sell an underlying asset at a pre-determined price on or before a specified time. The option buyer acquires a right, while the option seller takes on an obligation. It is the buyer’s prerogative to exercise the acquired right. If [...]