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| Share Cafe Commentary |
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| Writing Covered Calls |
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Australian Financial Services
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| License (Licence no: 246670) |
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or 1300 306 308 |
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How to Make Regular Income on Your Existing Blue Chip Shares
Investors who own Blue Chip Stocks can earn a regular income in the Options Market. This is simply done by Writing Covered Calls over your existing stock. A Covered Call is a Call Option sold/written when the investor already owns the stock. One Option Contract normally equates to 1,000 shares. The risk involved in writing covered calls is the underlying share price trading significantly higher than the strike sold. In this instance, the investor forgoes the opportunity to sell the stock at a higher level. This risk allows Blue Chip Stock holders to earn regular income on Call Premium sold.
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Use Derivatives to make money in any market conditions! Click here for your complimentary report or call us on 1300 306 308 to take your next step. |
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Please note this section is intended for INTERMEDIATE-TO-ADVANCED INVESTORS ONLY. Derivative products are extremely risky. Investors should be aware that there is no guarantee that they will profit from investing in these products. Investors should also seek advice from an accredited Derivatives Adviser and a Tax Specialist. |
| Issue Date October 28, 2008 |
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| We believe the stock is looking attractive for existing shareholders to secure premium. Investors holding a minimum of 1,000 shares may consider selling the $15.00 (WDCQE) November 2008 Call Option at a premium of $1.19 (time of writing) for income. If the stock closes above $15 at expiry, your option may be exercised so that you effectively sell your stock at $16.19 (i.e. $15.00 + $1.19). |
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| NOTE. When an investor sells a Call Option over a stock the investor does not already own, this is known as Writing Naked Calls. Investors should note that Writing Naked Calls exposes the seller/writer to unlimited losses and we strongly advise AGAINST such practices. |
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Archive of past Wise-Owl™ Covered Call Recommendations |
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Recommendation Date |
ASX Code |
| View |
23/09/2008 |
NAB |
| View |
12/06/2007 |
MBL |
| View |
21/05/2007 |
WPL |
| View |
16/04/2007 |
BHP |
| View |
04/03/2007 |
WBC |
| View |
11/02/2007 |
WOW |
| View |
21/01/2007 |
WES |
| View |
19/11/2006 |
CML |
| View |
23/10/2006 |
LLC |
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Use Derivatives to make money in any market conditions! Click here for your complimentary report or call us on 1300 306 308 to take your next step. |
The securities recommended by PPS Investments Pty Ltd carry no guarantee with respect to return of capital or the market value of those securities. There are general risks associated with any investment in securities. Investors should be aware that these risks might result in loss of income and capital invested. Neither PPS Investments Pty Ltd nor any of its associates guarantees the repayment of capital. To read the report disclaimer click here.
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