Deep In The Money Covered Calls: Lower Cost, Risk & Win 75% Of The Time

Last week, I explained the nuts and bolts of covered call investing – a bullish strategy that focuses more on returns than it does on risk.

In my column, I used the example of Yamana Gold (NYSE: AUY), showing you how to reduce your cost when buying stocks – and thereby increasing your upside potential if the shares move higher.

Today, we’re going to kick things up a notch and explain how you can cleverly take the same covered call strategy and add a twist, by using deep-in-the-money covered calls. When you do so, you can achieve more consistent returns over time, while also…

Option Pitfalls

Five Pitfalls Stock Option Investors Make Over and Over Again

One of the best ways to make money in the stock market is to not buy stocks at all. But instead, buy a stock’s derivative — or option. This way, you can actually control more shares of stock than you would normally be able to afford with limited downside, and virtually unlimited upside.

Many savvy investors do this all the time, instead of wasting time on regular shares of companies that at best, will only produce a tenth of what the company’s options will potentially bring investors. We’re talking about upwards of…

Options Trading: How to leverage market volatility into profits

When trading options, the key to winning speculation is to risk as little money as possible to make the biggest return. And that perfectly describes the opportunity I’ll be presenting you today.

For starters, let’s look at the stock movements of some of the top mortgage lenders. On July 10th 2007, Fannie Mae (FNM – NYSE) closed at $66.49. Today it trades for $34.34, good for a 50% loss.

Also on July 10th 2007, Countrywide Financial (CFC – NYSE) closed at $37.34. A week ago, it traded for $5.01, marking an 87% loss.

In short, two of the biggest mortgage lenders…