When I read this, I just shake my head.
In the article I saw that their return is 3.3%, which over a year might be 6.6%. The downside to this is that it is relatively close and you could get called away (eg dividend, etc). Thus you might miss out on the dividend while capping your upside.
So I thought, what would I do? I went onto my terminal entered BOND XOM and found nothing that would mature in about a year. Then I went BOND BP and found a 12/14/2010 bond that has a current yield of 4.5%. Not the 6.6%, but your dividend is secure and you get more interest from a bond. And since it is a short term bond you don't have to worry about the price dropping when interest rates increase.
Christian Gross
On 02/01/2010 13:39, Jeff wrote:
I thought this might be of interest to the group…
Covered Calls Prove Popular Strategy
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