There is one group of people who should consider selling covered call options against their portfolio. This is people who are running personal superannuation funds or personal allocated pensions.
The criteria are
1) the stock must be one that you have in your portfolio and are happy with.
2) you have enough of the stock to sell covered call options
3) you sell out of the money options
The price that you pay is that if the market rises sharply you are not going to get the full amount of the increase.
On the other hand if the stock does not rise more than the exercise price then you make a profit.
Selling covered call options will not make you rich but it will increase your return on your investment.
This could be of great use to person's with allocated pensions who want a reasonable return on their predominantly income portfolios.
