Pablosba

Stick with Covered Calls

Another tactic I use with covered calls is to set a stop loss 10% below my purchase price to protact downside at no additional cost. I then raise the stop as the stock goes up to maintain a reasonable cushion. This expects the call price to drop substantially if the stock drops back to my stop level so I still reap some call income while protyecting my downside. I also invest in strong dividend stocks so buyers have an incentive to exercise and qualify for the impending dividend pay if the stock hits the strike price early. This just improves the ROI. Do these tactics make sense?