GrassFarmer, Crusher-About covered calls

[hobbyfrmr]

How do you pick a stock in which you want to sell covered calls on them? Or.... where can I read up on this.

The only thing I am aware of, is that its helpful if the stock pays out a dividend. More appealing to own them.

Do you look into the stock, then look into the options premiums you could charge and strike prices? So, the higher the premium you could charge on these stocks would help your decision in buying the stock?

I have some money I want to place into covered calls. I really dont know how to choose the stock.

Due to my lack of knowledge, it seems like a big crapshoot to me.

[mcfarms]

Google or Andy Sirski

[grassfarmer]

To start with it's maybe easier to get Sirski's newsletter - he sends a months trial for free I think then it's $200 a year. He tells you the stocks he owns and once you get familiar with it you can search out your own. You want to own stocks in good companies - things it's worth owning in an up or down market.
To check out the option premiums go to
http://www.m-x.ca/nego_cotes_en.php?symbol=ABX*&image.x=18&image.y=1 1#cote
that is the page I've bookmarked - its Barrick Gold showing the options for that stock. Use the drop down menu at the top where it shows "ABX" to check any of the other stocks with options available.
One stock I like is First Majestic(FR) a developing silver miner although I hear they came out with news yesterday that their reserves were lower than previous estimates which will maybe lower their stock value a little.
Yesterday's closing price was $17.51 and the January $17 option was paying $1.80. So you take the $1.80 now - if the stock is above $17 in January its exercised and you've earned 7.3% in 2 months. If it's under $17 you still own the stock and you've got the $1.80 so can sell another call for a future month.
Thats just a simple example, there is a lot more to learn about what to buy, when to buy and when to sell. I suggest you give Andy a call as he can explain it better.

[crusher]

All great suggestions above. To pick some of my stocks or options, when you are at the montreal exchange site, you can use screening tools to find stocks paying high premiums and pick your stocks that way. But you still need to review the stocks you pick. Fees can eat away at your profits also, youll need to include that in your calculations. Not that hard to make 5% a month, just takes some work.

[hobbyfrmr]

Thank you for the help. This will be useful....I know its not AG commodity marketing, but, its along the same lines.

[cottonpicken]

To be fair you have to add in options that fail to your
overall portfolio performances,i think they are almost
completely pointless,but what ever to each his own

[grassfarmer]

Fair comment cotton, I wouldn't claim 5% a month is easy to do - thats 60% a year. 20% a year seems to be within my capabilities with my current knowledge and thats enough for me.

[cottonpicken]

Ya so anyone here with some brains?

"the options trade nobody knows"


"i make 20 to 60% Returns"

"fool proof"

**** off,i'll let my kids play for a quarter
'

[cottonpicken]

Remember-i say that with extreme hatred,i will not
allow some brethren to be sucked up into the "new
hostile opportunistic jackals".

Your against a farmer and a trader-new guys!

[grassfarmer]

"Ya so anyone here with some brains?"

Looks like you are needing some with those nonsensical comments.

[cottonpicken]

I am sorry Grass,i was shooting in the dark,at
something i thought i seen,lol

[cottonpicken]

Your not watching markets?

[cottonpicken]

Tonight......?

[hobbyfrmr]

Well, ok cotton you like picking the stocks and riding them. Fair enough. Where does an amateur find sound honest education for trading stocks? Do I spend a weekend at some trading promo in Calgary, New York, Toronto? I am thinking more like I would like to utilize some existing (banks, or CU's. Yahoo Finance, Google Finance)stock screening software and some technical indicators to help my decisions along. Basically I would like to learn about trading and making some money with my computer habit. Facebook is only interesting for so long, then I realize I am not using the computer for work, or to provide value to my life.

[riders2010]

Why not have a mock contest, grassfarmer vs cotton and anyone else that obviously knows alot about this stuff. Start each out with 100,000 grand to work with, show us the trades stocks, commodities etc you would do. Since this is a marketing forum for the better of all why not? Aside from alot of donated time and knowledge of course lol! Or if not simply pick a handful of stocks etc. show us how it is done. I