OK.. crisis in the house dealt with... need help from anyone that can simplify this for me - I'm looking into doing options...ie. covered calls...
* As of December 5, you own 200 shares of XYZ stock and the current price is $75 per share.
* You see long-term potential in the stock, but expect little movement in the short term.
* You sell (write) two January call options at the $80 strike price for $4.
* If the stock stays below $80 by the January expiration, you keep both your stock position and the $800 from the sale of the option.
* If the stock rises above $80, your shares could be called away, resulting in $1,000 in appreciation of the stock (from $75 to $80) plus the $800 you earned from the sale of the calls.
* If the stock pays a dividend, you'd also continue to receive the dividend for as long as you hold the stock.*
