Monthly Archive for: ‘May, 2009’

Buying Call Options

Posted May 28 2009 by Joshua Kennon in  with 1 Comment

Buying call options is the opposite of selling covered calls and is an extremely aggressive strategy.  You can generate big losses, but if you’re right, huge (and I mean huge) gains.  The only reason we are willing to do it with a very small percentage of our assets is because we have the liquidity, net worth, and profitability to support …

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Selling Covered Calls

Posted May 28 2009 by Joshua Kennon in  with 0 Comments

The volatility in the markets has caused pricing for certain derivatives to shoot through the roof, allowing investors to earn huge returns by selling covered calls (also known as writing covered calls).  Here’s an example of a real transaction involving selling covered calls that one of our businesses recently contemplated. Right now, we could purchase 6,000 shares of U.S. Bancorp …

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"Financial success isn’t glamorous. It is making sure more money comes in than goes out and that the money you keep earns a good rate of return at the lowest possible risk. That is it. That is the recipe. If you do that for long enough, you can end up rich." - Joshua Kennon, Managing Member