Tackle Today: Do you trade Covered Calls?
December 7, 2018
Last update: August 2021
≈ Cash Flow and Growth ≈
I put a poll question in the clubhouse recently asking the Tackle Trading community a simple question: Do you trade Covered Calls?
If you haven’t answered the question yet, you still can HERE.
Of the 5 potential answers, the breakdown was interesting.
- 38% said YES in my Margin/Trading Account
- 7% said YES in my Retirement Account
- 26% said YES in both accounts
- 11% said NO I prefer other strategies
- 16% said Not Yet but I’d like to learn
If you’re a new trader, you are sure to be attracted to all kinds of different strategies and techniques. Don’t forget about the Covered Call. It’s a powerful technique to use and does work in multiple different types of trading accounts.
Some veteran traders have been hit by a Covered Call when the stock went down or if they held through earnings. If you have traded only a few of them but didn’t learn how to hedge or protect here’s a challenge: Learn how to collar your Covered Calls. If you learn to collar the trade on downward pressure you can reduce downside risk while you still maintain the position.
It’s a wonderful technique and one that our community of traders embraces – mostly. If you’re in the 11% that prefer other techniques, great! But, if you simply haven’t learned it yet, try to review the system rules, download the journal so you can practice some and get in the game.
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