Wednesday, February 9, 2011

Covered call strategy explained!

It is a derivative trading strategy. It essentially means that you own a stock and sell call on the stock you owned and collect the premium. This strategy make sense if one wants to keep hold on the stock and thinks that in the short run its price will be either stable or slightly goes down........... but sure that its long term prospects are good. The strategy has been nicely explained by a finance professor. Here is the [link]!!

1 comment:

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