Why take this course!
Options trading helps you make money in an UP market. And a NEUTRAL market. And a DOWN market. Options are an investment vehicle that empower you to operate with less risk, and rewards you with the potential of regular income.
There are risks in trading options, just as there are risks in trading stocks or mutual funds. These risks can easily be managed once you have the proper knowledge regarding these financial contracts. Options can be used by speculators to increase leverage and gamble at higher risk/high reward strategies. However, investors can also use options in a very conservative way to generate income and protect against stock and general market declines. The Covered Call strategy is in the more conservative camp of options investing strategies.
This course concentrates on COVERED CALLS. It is designed to bring new investors up-to-speed quickly, and to give long-time investors a fresh look at how they can improve their wealth-building capability. This course is designed to help you obtain that knowledge so you can become a more educated options investor, specifically in regards to the Covered Call strategy.
When you’ve completed this course, you’ll be an expert on covered calls; you’ll know why prices behave as they do and why one strategy may be better than another at a particular time. When you understand the “whys,” you’ll know instinctively what to do and what not to do.
The only magic formula for options or any other kind of trading or investment is to have a complete understanding of your strategy and how to apply it. This course will help you achieve that important goal.
TIP: This text will also showcase one of the premier internet tools available to help you find, compare, and analyze these investments: PowerOptions. The course uses graphics and examples from the PowerOptions web site. When you have completed your training, you aren't restricted to using PowerOptions for researching and managing your trades (although you are invited to consider it as a proven investment guide); it simply serves here as a means to help you use data and calculations that will be valuable for your future options trading.
If you have ever researched or traded options you are probably familiar with the Covered Call strategy and this Risk-Reward chart. Investors who apply to trade options through their brokerage firm are allowed to trade Covered Calls as a Level I investor. This is because Covered Call investing is arguably the most conservative options strategy an investor can use in their portfolio to increase returns, add protection and generate income.
Kopin Tan, a respected columnist who writes for Barron’s financial paper once wrote, “A survey of options investors who trade options tend to be more independent, risk-tolerant, richer and better educated than those who don’t.” This statement was based on a study performed by Harris Interactive as commissioned by the Options Industry Council. The article, titled ‘A special Breed, Typical option user: richer, smarter, independent,’ states that those options investors surveyed “are more likely to personally research investments; are less reliant on stock and mutual funds; and are keener to learn about new ideas and vehicles.”
Tan continues on to say that 71% of those surveyed who do not trade options say they do not understand options despite the increase in educational tools and information that has become available over the last several years. Of those surveyed that do not trade options, 30% feel that options are “too risky” and because of that they would not consider venturing into that investing arena.