Dividend stock covered call strategy

Dividend Stock covered call strategy

I'm changing strategy, I'm now converting to a dividend strategy with 90% of my account I'm going to accumulate dividend paying companies and accumulate dividends.
I'm getting killed with the option strategies I'm trying. Can't take the losses. Just an fyi.

The only gain I have managed to make over the past two years have been on some small accounts where I have purchased small amounts of dividend stocks and held them for a minimum of 6 months. I'm up on those accounts by roughly 20-30%.

Imaging if I took the money the I was investing in options over that time and just collected dividend stocks and used a strategy called selling covered calls on one in particular bac.

Selling covered calls is a strategy you use when your bullish on a stock and believe that it will continue to go up in value. It also gives you some downside protection.

1. Buy 100 shares of the company stock.
2. Sell a call against the stock you purchased.
3. Take note of the strike price of the call you sell. lets say it was microsoft stock you bought 100 shares at $90 a share. If you sell a call that expires in two months at. the $92 strike you would collect $150 in premium for selling the call plus whatever the stock appreciates to by expiration.
4. If the stock goes past the strike price of $92 the stock can get called away, but you would make the full premium $350. Thats 175 a month.

I will update you on my progress, stock picks, and gains or losses going forward.