Kiplinger

Covered Calls: One Way to Earn Extra Income on Your Stocks Without Additional Risk

"Boy, I would definitely sell Apple if it reached $170 again," a client said to me recently.

Like many people, she believed entering a limit order at that price was the logical next step. As we explained, however, writing a covered call option might be a better way to accomplish her objective. Compared to holding the stock until the target price, it's a strategy that provides additional income without incurring extra risk.

Even though most people have heard of the idea, very few people seem to put it into practice. I

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