Chuck Hughes: Monthly Buy Write Strategy

The monthly buy write strategy is a great way to profit during uncertain markets. The strategy does not require a large price move in the underlying stock to produce good returns and does well in flat or even down markets. Selling monthly call options provides an excellent income stream and risk adjusted return. And monthly buy write trades incur less risk than owning stocks. The strategy is easy to implement and can be traded in most retirement accounts. I have had good success writing monthly buy writes with lower cost ETFs with good liquidity. These ETFs are very liquid, have a small bid/ask spread for the stock and options and have numerous monthly strike prices available usually in increments of .00. These monthly buy writes have the potential to deliver about a 5 to 8% monthly return which can result in a good annual return.
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