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The Covered Call / Buy-Write Strategy For better or worse, most investors purchase stocks with the intent of holding their shares for an extended period of time.

We do this mainly because the media and industry professionals have drilled into our heads, year after year, time after time, that it’s best to buy and hold. The recent bull market phenomenon also fueled this mindset because the ‘buy and hold’ strategy worked extremely well - for a while.

Whether or the not the ‘buy and hold’ strategy is still the most efficient way of investing remains a topic for discussion. However, it is still the strategy that most investors are comfortable with and tend to follow.

The first strategy we will discuss is a hybrid of the buy and hold strategy, one that provides for better and more consistent returns a large majority of the time when compared to naked stock ownership alone.

When we buy a stock, there are three possible outcomes. As we discussed before, two of these scenarios are typically negative and only one outcome is typically positive. If the stock goes up, that is good. If the stock goes down, that is bad. And if the stock does not rise or fall, that is also unsuccessful.

To briefly recap, not only do you have a loss in opportunity cost (the money invested in your stagnant stock could be making you money if somewhere else) but also, you have incurred commission costs on both the way in and way out. So, in this case, only one of the three scenarios provides a positive return.

We will discover the three possible scenarios as the “up” scenario, the “down” scenario and the “stagnant” scenario. By employing the covered call or “buy-write” strategy, you can change the outcome of the scenario profile so you have two positive potential results instead of only one.

Employing the covered call or “buy-write,” we still have the “up” scenario as a positive result, but now the “stagnant” scenario will also produce a positive result since we collect a premium and the third scenario, the “down” scenario will not be as negative.

Thanks to the covered call strategy, now two of three scenarios end in a positive result and the third has a result that is less negative.

Let’s take a closer look at the covered call strategy and its construction. There are two components of the covered call strategy, the stock component and the option component. The stock component consists of a long stock position (you own stock). The option component consists of selling one call per every one-hundred shares of stock owned.

Remember, one option contract is worth one hundred shares of stock. So for example, 1000 shares of stock equals 10 call contracts or 200 shares equals 2 call contracts.

The following table displays a few more examples of the correct construction of buy- writes.

Please take special note that the ratio of stock to calls must be exactly 100 shares to 1 option contract.

The philosophy behind the covered call strategy is not complicated. It entails using a long stock position along with a short call option to create a positive stream of additional income, much in the same way a person would purchase a house and then lease it out to collect rent in order to pay for the mortgage.

Another analogy is that of the insurance company. An insurance company receives premiums month in and month out. Over a period of time, this constant stream of income easily builds to a point where it outweighs any pay out the insurance company may face, even for catastrophic events.

The constant and reoccurring collection of option premiums works better if done over longer periods of time (for example, one year.) That time frame allows the odds to play into your favor.

Now let’s talk about the odds. There have been several studies done on the topic of premium buying versus premium selling. The goal of the studies was to determine whether it is better to buy options or sell options.

Recent studies have found that selling the premium was the correct trade 78% to 83% of the time. That is a very high percentage and is worth taking advantage of when a good opportunity presents itself.

The covered call strategy takes advantage of the fact that an option is a depreciating asset because its extrinsic value goes to zero at expiration. The process by which an option’s extrinsic value dissipates is called time decay.

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How does a nice hot cup of coffee sound? Great, of course! Especially if you have your own automatic espresso coffee maker.  One of the best choices is the Cusinart Coffee Maker and the Bunn Coffee Maker.

Heck, we all love a nice, smooth cup of Joe, like one made from a Thermal coffee maker. We can’t help this addiction of course. It’s plain and simply in the genes. We should blame our ancestors for wedding anniversary gifts if we have to toss blame on someone. After all, they’re the ones who started this whole “addicted to caffeine” thing. However, back then they certainly didn’t have the automatic coffee maker. In fact, these are actually not that old at all. My mother was telling me what a big deal it was when they finally came out with the automatic coffee maker. Can you even imagine? I can’t. I’m used to having my personal espresso machine propped on the kitchen counter. I would hate to imagine life without it. I’ve grown too accustomed to the convenience.

What is your ideal automatic coffee maker? Is it from the delonghi coffee makers or the Mr Coffee coffee maker? Have you found the right machine yet? I think it’s rather difficult browsing through the countless java machines now days. How can you ever choose just one groomsmen gifts, and what if some other one is much better than yours? Oh well, it basically comes down to what you want out of it. If all you want is a decent cup of drip coffee, then an automatic coffee maker should be quite simple to find. Hop online and sort through numerous reviews on the top drip machines.

This will make it much easier to find that perfect automatic coffee maker like a Black Decker coffee maker. Now, if you’re looking for something that virtually does it all, then you may want to check out what’s new from Braun. They offer an all-in-one automatic coffee maker that also deals with tea, hot cocoa and cappuccinos.  Be sure to buy one which has coffee maker parts that are easy to find.

I recently purchased an automatic coffee maker for my mother as a gift. Not only does a 1 cup coffee maker make a magnificent cup of java, but it has a built in bean grinder for groomsmen gifts. This way she can truly enjoy a fresh cup of coffee every morning or evening.

You’d be amazed at how freshly ground beans change the flavor of coffee with these programmable coffee makers. So if you’re searching all over the place for the black decker coffee maker and improved automatic coffee maker, then look no further than your laptop for commercial coffee makers. With online access at your fingertips, you can easily browse through all the newest and highest rated automatic coffee makers. That perfect java machine is certainly out there waiting for you.

Have you encountered any unforeseen crisis that has to do with your finances? If you can research further you will be able to find another option for you to secure another option for your finance problems. Bank issue payday loans can assist you with this matter as well as allow you to have your applications processed in a short period of time.

Bank issue payday loans are also called as cash advance or paycheck loans. You will be able to take advantage of this loan for a certain amount and have it pushed through a prescribed procedure.

There are specific lenders that offers bank issue payday loans which borrowers can choose from. Let’s say that your car needs repairing at the soonest time possible. Because without a your car you won’t have the capability of traveling from here to there going to your work office or somewhere else important. Or might as well for instance you need to attend to an emergency and that emergency requires you to produce a certain amount of money that is not in your budget, bank issue payday loan may assist you to be able to provide you that small amount that you need in a short period of time.

Bank issue payday loans is not a long term when it comes to financial assistance. Your payment for the amount of money that you acquired may be due on the next pay period that you have agreed upon with the lender.

Bank issue payday loans includes interest rates that are higher that regular loan providers. This is to give the lender the freedom of the doubt that the borrower would pay accordingly to the terms and conditions stated upon the agreement. The interest rates ranges approximately from three hundred to seven hundred percent.

Now the question here is, should one avail of bank issue payday loans? Why not? As long as you are in need of a certain amount of money that would help you fix a certain financial problem then you may avail of this type of loan service. What you have to act purposefully of is to be able to pay back the same amount of loan on or before the deadline to avoid penalty and higher risks for higher interest rates.

there is no doubt that bank issue payday loans can provide you the money you need for that certain period of time.But before you avail of the service read the lenders terms and conditions so you can get a clearer understanding of what the objective of their loan service is and how can they be of service to your concerns.

Check out fast payday loans online for more advice about Arkansas payday loan and an updated version of Idaho payday loans.

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Building New Credit Habits

Repairing your credit entails getting rid of the
negative credit report information and catching up on
your overdue bills. This could raise your credit score
but might not be enough to make you credit worthy
again. However, to raise your credit score high enough
to entitle you to a loan, you have to rebuild your
credits. Doing so would only prove that you have the
capability to handle credit responsibility.

Although it might be difficult to start, but once you
achieve that momentum you need, you will be sashaying
to a good credit score. You can always begin by
developing the required credit habits.

The Do’s of Using Your Credit Card Wisely

Although many people are born without the skill it
requires to use credit cards, it is important to learn
the rules of the game. All you need to do is to
remember simple do’s and don’ts of credit card usage
and in time, you would welcome healthy spending habits
in your financial life.

The first thing you do want to ever do is to use your
credit card to make your everyday purchases,
especially food, gas and clothing. It is bad enough
not to have cash-on-hand but buying simple everyday
items can develop into a habit wherein you may tend to
substitute a credit card with cash. It is always
advisable not to take your credit card out of your
wallet for everyday purchases but instead use your
cash or a debit card.

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The next thing you do not want to do is develop a
habit of making minimum-only payments. If you make
minimum payments each month, you are only increasing
the length of time it will take for you to pay off
your debt. Additionally, it will also increase the
amount of interest you could end up paying.

If you are one of those people who usually buy things
that are way off budget, remember not to use your
credit card to buy things you cannot afford. One way
to get into debt is living off borrowed money. You
might end up waking one day realizing you are so much
indebt that you wish to return your expensive
purchases back to wherever you bought them from.

The Do’s of Using Your Credit Card Wisely

Learn how to make correct decisions when it comes to
buying items you need against those you simply want.
Everybody knows what a “need” is and what a “want” is.
Remember not to substitute need from the want and vice
versa. If you are using your credit card wisely, it
only means that you are being responsible in
recognizing what things you need and which you only
want.

Next, always let your creditor know in advance if you
would not be able to pay your monthly payment on time.
Since most creditors offer assistance with your
payment if you give them a heads up, it is important
not to simply forget about the payment for no reason
at all. You can do this by simply calling your
creditor, explain the situation and ask if they allow
late fees to be waived.

Lastly, do not exceed with your credit limit. The
safest is to stay within at most 30% of your credit
limit. Because the major part of your credit score
reflects on the quantity of debt you actually have, it
is important to keep your balance low in order to
preserve a good credit standing.

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One of the major revenue producing enterprises is the beverage industry and of course coffee is a major part of the industry. This leads to thousands of different advertising companies competing for the chance to advertise the products, like coffees, bottled water, sodas and teas. There is one major ingredient that most products have; caffeine. In advertising, you generally see different terms applied to non-caffeinated drinks, such as decaffeinated, naturally decaffeinated and caffeine free.

Normally, a beverage is considered caffeine free only if it never contained caffeine from the start. Of course, this would rule out the tea leaves and coffee beans since they both have caffeine content in their unprocessed, natural form.

Actually, there is a certain amount of caffeine that is contained naturally in various coffees and teas, so if you really need your cup of coffee or tea to be non-caffeinated, then pay attention to the natural amount of caffeine that is in the product and then find out how the remainder of the caffeine is removed from a specific type or brand.

Even in this day of modern technology there is no way that any method can completely remove all caffeine content from a product. In the United States there is no “law” about removing caffeine but the standard indicates a beverage can be sold as decaffeinated if 97% of it is removed. In Europe, they have a higher standard that indicates it can be termed decaffeinated if 99% of the caffeine is removed. There are certain things that affect the content of caffeine that are actually out of the manufacturers control and that includes the steeping times and methods of brewing, which both drastically impact the amount of caffeine that you end up drinking.

The results are very interesting if you do an internet search on how coffee is actually decaffeinated. You may find results to be confusing, conflicting and possibly even misleading. Manufacturers do not want to lose out on any of the consumers’ money that is spent on beverages. This can lead to manufactures telling the public whatever they think they want to hear about their product being caffeine free. Try doing a little of your own research on the methods that are used to extract the caffeine content from common beverages and you are very likely to be a lot choosier with your next purchase.