Wednesday, May 03, 2006

AIMing with Puts and Calls

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There has been occasional mention of selling Call options against your AIM holdings. Covered Calls and other option plays against your AIM holdings can give you some additional income.

E.g., if your next AIM GTC Sell order would be for 100 shares or more at a strike price that is now fairly close, above, the present stock price, might as well sell a Call, and keep the premium.

If the stock doesn't reach the strike by the option expiration date, you got the premium and you keep the stock to sell another Call against it.

If you are called (exercised) on, you still got the premium, and you get the price you want for the 100, 200, whatever shares you are called upon to sell.

Other plays for when you are near a buy point.

Sorry I don't have time to go into this, there are a lot of things to consider, but if interested, check out coveredcalls.com, generatethousands.com, and other sites.