Seller's Paradise

Sometimes investors ask "If I had $50K to invest, and wanted $1000 per week (or per month) in income, how could I do it by selling options?" Great question and one we have a software tool designed to answer.

The Income Goal tool is a power tool. It can be used conservatively or aggressively. Imagine a power drill... you could hang a painting (conservative) or build an ark (aggressive). Our tool allows you to do either one.

When it comes to investing we consider "conservative" to mean modest return goals without using margin, and "aggressive" to mean higher return goals and using margin to help get there. Whichever way you prefer, we have some guidance to help you (meaning screen shots of the tool and suggested parameters to use). Please see the articles Conservative Goal Usage and Aggressive Goal Usage. If you're not familiar with the tool then start with the conservative article; then the aggressive one will make more sense.

Seeking Alpha author Lukas Wolgram recently wrote a covered call article showing how to double your income yield on AT&T using covered calls. The yield on T is over 7% already, so doubling it makes for a pretty good income. The article makes some reasonable points about why now is a good time to get into T. Check it out on Seeking Alpha: AT&T: Why Now Might Be A Good Time To Double Your Total Income Yield With Covered Calls.

Another Seeking Alpha contributor claims to be a Dividend Growth Investor (buying stocks that have raised their dividend every year for 5, 10, or 25 years). He has written about his experiences layering on a covered call program to his existing dividend portfolio. The results were good and now he calls himself a Dividend Growth and Income Investor. He has seen the light. To read about his experience, results, and to see his portfolio, check out Writing Covered Calls In A Dividend Growth Portfolio.

Investors have a choice when selling options. Do you sell a series of short term weeklys to capture max time decay, or sell something with 30, 90, or even 180 days until expiration to reduce transaction costs and increase downside protection?

The right answer will not be the same for every investor. Depends where you trade (your transaction costs), your risk/reward goals, your outlook on the market and the stock over various time frames, taxes, and other factors.

Recently, StreetAuthority published an article discussing the various points of view, as well as reviewing how time decay is non-linear. For more info, please see The “Sweet Spot” for Covered Call Trades as well as our own article Time Decay In Options.

With about a month to go until January's monthly options expire, the top 4 covered calls Born To Sell members have written are (in order of popularity):

(Note: Born To Sell members have access to the full Top 10 Covered Call list, as well as having this list update real-time as members change positions. These are not recommendations, they are merely a reflection of our members' current positions.)

Currently, the top 8 stocks Born To Sell members are using for their Watchlist are (in order of popularity):

(Note: Born To Sell members have access to the full Top 20 Watchlist, as well as having this list update real-time as members change their watchlists. And, you can have the highest yielding covered calls from your personal watchlist emailed to you after the close each day. Never miss a fat premium from your watchlist again!)

Born To Sell is dedicated to only one thing: Making Money With Covered Calls. Our subscribers have access to state-of-the-art covered call screeners and covered call portfolio management tools. For less than the profit of a single trade you could be enjoying recurring monthly income using our tools. Three subscription types to choose from:

Plus, all subscriptions begin with a no-obligation 2-week free trial. What are you waiting for? Start collecting premium today!

Happy Trading,

The Born To Sell Team