Writing Covered Calls can be a good opportunity to have an additional source of income. This is all about the Buy/Write strategy that one needs to develop with respect to the stock market trading with their existing stock.
TradingPursuits introduced their free introductory stock market education seminar that can educate a trader in developing a Writing Covered Call strategy. To attend a more advanced course and to receive course materials a fee must be paid. The course helps traders to generate potentials from their CFD trading.
Pay Off the Shares Over Time
Write covered calls can make an investment in shares more profitable when the break even on the share prices moves southwards and an investor increases his earning potentials with less risk. Finally, this makes an investor fully capable to get back the invested amount in shares with premium income.
The strategy allows you to “pay off” the shares over time but you don’t need to pay anything to keep the shares. That’s the advantage of Writing Covered Call strategy.
How Does the Writing Covered Calls with CFDs strategy Works?
The writer of the call options can invest in CFDs instead of buying shares. It helps the writer to add leverage and enhances the level of profitability. But at the same time, it brings some risks that a trader must be aware of. This is the reason why we encourage investors to undergo a training program before using the Writing Covered Calls strategy for CFDs.
The word “covered” used to signify the strategy is itself a guarantee that the seller of the calls will remain protected from any risks when the stocks move northwards. At the same time, someone who is uncovered can be at the risk of suffering significant losses, in case of the upward movements of the stock.
Thus, you must have understood how covered calls are more profitable than naked calls. With the appropriate knowledge, research, and a plan, Writing Covered Calls and CFDs go well together and is a safe way to stay profitable and risk-free.