Learn about investing, trading, retirement, banking, personal finance and more.
A covered straddle is a bullish options strategy, where the investors write the same number of puts and calls with the same expiration and strike price on a security owned by the investor.
If an investor owns a stock and is bullish about where it’s price is headed, they may use a covered straddle strategy to provide them the ability to buy more shares at a set price (the call option portion of the straddle) while also giving them the option to sell the security at the same price (the put portion of the straddle).
The covered straddle strategy is not a fully covered one since only the call option portion of the straddle is actually covered. The put position is uncovered, which means that if assigned/exercised, it would require the option writer to buy the stock at the strike price.
The profit available in the covered straddle strategy is limited to the number of premiums collected when the options were sold, plus any gains you can get from your long stock position before it gets called away.
The better choice might be different for each investor. There is no clear-cut answer to this question, since it will...
Unlike short-term stock picks, these articles are concerned with growth that will go beyond the short term uptrend
Money from 529 Plans can be used for tuition, books, supplies, room and board and, as of recently, computers
Withdrawals and loans can be taken out of a 401(k) before retirement, but the money may be subject to penalties and taxes
Deductible IRAs provide a way to lower your taxes because you can deduct contributions to your IRA from your income
The Dividend Payout Ratio represents the percentage of a company’s earnings/profits that they pay-out to shareholders
Pensions are income streams guaranteed to employees upon their retirement. A Pension is a type of Defined Benefit Plan
Leading indicators are economic or price data which have some degree of correlation with a movement in the market
Distributions from qualified educational accounts such as 529s will be reported on a 1099-Q
The Rising Wedge pattern forms when prices appear to spiral upward, with higher highs and higher lows