What to Do if You Blinked and Missed the Stock Rally – Wall Street Journal- Topic: Stock Trading News
Like most people, I don’t sit glued to a screen with stock quotes; I don’t check the market every day let alone every hour; and my system isn’t designed for split-second market timing. Last week I mentioned a strategy called “covered calls,” which involves the simultaneous purchase of a stock and selling calls of the corresponding option. When you write a call — which conveys the right to buy shares at a specific price for a specific time period — you receive the cash and your account statement reflects an offsetting debit, which declines as the option price drops. I never recommend selling calls on stocks you don’t own — so-called naked calls — since you might be forced to deliver those shares at very high prices. read more
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