How Does Covered Calls Work? | ** An Anonymous Journal **

Friday, November 02, 2007

How Does Covered Calls Work?

It has been some time since I liquidated my stocks. The share and options market are so volatile, I felt that I could not afford the risk. Just last evening, I heard the news that America may lapse into a recession. That will be bad news to all of us. Did you know that the rest of the markets trend in tandem with Dow Jones? And when it falls, KLSE falls too.

Anyway, I was doing a little reading on options trading on PowerOptions which is a web-based stock options data provider with the aim of helping people make better investment decisions, I read the long article on how to exit from covered calls portfolio.

I have to admit that I don't quite understand the theory of covered calls. I am the kind of person who does not absorb text well and would need to be shown how everything works.

On a side note, I am so glad that my US trading account is still empty at this point or my heart would have dropped together with the stock indices!


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