Does anyone here invest in Covered Call Options?

[bzb]

I'm interested to hear your take.

I'm not looking at it as a way to get rich quick - but rather a way to make "mailbox money" - or a few hundred extra bucks a month with a few hours per week time investment (and of course a capital investment). And, of course, a way to limit risk while still providing an ample income opportunity...

I'm at the point where I've joined a website and am now practicing with monopoly money. I have actually considered selling my toy to put into this...

[acalliste]

I have no idea what you're talking about, but if you are selling your bike to do it, it has to be a horrible idea.

[bzb]

Hehe, bikes can be bought again. I'd only sell the SS for around 5-6000. And I'm thinking that if I can be disciplined enough with this for a few years - using that $6000 and not touching any gains other than to reinvest it - I can pretty much buy any bike I'd want by then.

Mmm, Desmosedici.

Course, then I'd need a huge life insurance policy.

[Builtgypsy]

Think about it for a good few weeks, do more research into the company who heads it.

[bzb]

It's an investment strategy, not a company. Like futures trading, spreads, mutual funds, bonds, ETFs, etc.

[Gaolee]

I got into derivatives back in the 80s, and did very well for a while. Then I did very poorly and decided it wasn't worth the constant brain damage. If you enjoy the research and are willing to spend plenty of time, you might do OK. But, you are going to be trading with a lot of others who are doing the same research. Trading derivatives, including covered calls, is essentially a search for arbitrage opportunities, and there are plenty of sharks who do it all day every day. Unless you devote yourself to it, it can be a wild ride, but ultimately, there are easier ways to make a bit of income on the side.

[bzb]

Yeah, that's really what I'm investigating right now doing the paper money route - if I really want to invest the couple of hours per day doing tech analysis.

Is it really that stressful? Here's the story of what got me interested in this again.

I have a buddy at work who is insanely conservative with his money. He pays for everything with cash, has a 10-year mortgage that's almost paid off, and invests 22% of his income into 401k. Yeah, that kind of guy who lives like a pauper and makes you sick because you know he's going to retire at 50 without a worry.

The other day, I caught him reading a book on Covered Calls, and had to ask what's up. Turns out, his brother-in-law (head of family of 5) quit his Director position at AT&T two years ago and has been writing options the entire time as his primary source of income. He's gotten so good at it, he's actually managing 4 other couples' money and keeping a profit off their returns.

So after talking with the both of them for hours on end, they've gotten me really excited about something that I was already excited about a couple years ago. My coworker has NOT started actual trading, but is doing quite well in the virtual example he's been doing. He's as skeptical and tentative as I am when it comes to the markets.

But with my interest in riding waning (due to guilt of leaving family behind... not to mention the last 40 days of Noah's Ark rain) I'm thinking this is the perfect opportunity for me to get into it.

I have other revenue streams - DJ work, web freelancing, and construction/woodworking - but this looked to be something else that I could do in those wee hours of the night that I'm still up during the week. Like now!

Unless you're talking about other investment strategies that are "easier"? The huge upside to Covered Call writing is the limited risk (along with the limited profit potential, but that's a sacrifice I'm absolutely willing to make).