By blue chips and dips, we’re not talking about those fancy blue corn tortilla chips with salsa, no we’re talking about Covered Call positions for stocks of blue chip companies or very large companies.
Most Well Known Stock Option Strategy
The Covered Call strategy is the most well known stock option investing strategy. The Covered Call strategy is easy to implement and is less risky than many other stock option strategies. Entering a Covered Call position entails purchasing a stock and selling a call option against the purchased stock. The Covered Call position can return a higher return than experienced by the plain-old long stock position, and the converse is also true, the long stock position can return a higher return than the Covered Call position. A typical potential return for a Covered Call position is around 2-3% over a timeframe of one month.