Generate more portfolio income in volatile times with these options strategies
When times get rocky, options strategies can boost your portfolio's income — if they're done right.
TL;DR
- Options strategies can help investors generate additional portfolio income, especially during volatile market conditions.
- Covered calls involve selling a call option on stock already owned, generating premium income but potentially limiting upside if the stock price surges.
- Cash-secured puts allow investors to earn premiums while waiting to purchase a stock at a desired price, provided they have the cash to buy if the stock hits the strike price.
- These strategies complement existing income-generating assets but are not a replacement for them.
- Investors must understand the risks involved, such as missing out on gains or being obligated to buy stock at a price higher than the current market value.