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A Proven Money-Making System that combines Income Investing with the Power of Options.

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F.A.Q. Section: Click here to go to Options & Investing Glossary

1. How do I use this site? - This site contains many free tables and calculators, designed to aid income and value investors in researching high yield trades on dividend paying stocks.

We suggest starting with the High Dividend Stocks by Sector tables, which will show you a selection of dividend paying stocks for each industry sector, plus their dividend yields, current share price, and 52-week highs and lows. If you're interested in a certain sector, these tables will give you companies to research further. The High Dividend Stocks by Sector tables list dividend paying stocks which were pre-selected on the basis of their balance sheet figures, relative dividend payout ratios, current yields, current valuations, and option availability.

Once you've identified certain stocks that you're interested in, you can learn more about a specific covered trade by going to these 3 places:

2. Covered Call Tables - We've selected a few stocks from each sector to profile on this table, which gives you current prices, price changes, and call bid premiums for these stocks, plus the dividend amounts per share you'd collect in each specific trade. In addition, we give you the annualized yields for these dividends, call yields, and potential assigned yields. (Please see the glossary for definitions of these and other important terms).
Generally, investors use the covered call strategy to increase their yields and downside protection on stocks. This strategy is neutral-to-bullish. For an additional discussion of this strategy, click here to watch our 5-minute video, which takes you through 2 actual trades, step-by-step.

3. Covered Put Tables - We've also selected a few stocks from each sector to profile on this table, which gives you a second strategy for profiting from these stocks. This table also lists annualized yields for these dividends and put yields.

Options & Investing Glossary:

All-or-none order (AON): A type of option order which requires that the order be executed completely or not at all. An AON order may be either a day order or a GTC (good till cancel) order.

Annualized Yield: A yield figure commonly used for comparing investments of differing time periods. Annualized yield is calculated dividing 365 by the amount of days in an investment's time period, and then multiplying the resulting number by the nominal yield.

Ask / ask price:
The price at which a seller is offering to sell an option or a stock. See also Assignment

Assigned (an exercise): Received notification of an assignment by The Options Clearing Corporation. When selling covered calls, if the underlying stock's share price has risen beyond the value of the strike price received by the seller, his shares will be sold, (assigned), by his broker at the sold call's strike price, usually at or near the expiration date.

Assignment: Notification by The Options Clearing Corporation to a clearing member that an owner of an option has exercised his or her rights there under. For equity and index options, assignments are made on a random basis by The Options Clearing Corporation. See also Delivery and Exercise

Assigned Yield: Assigned Yields occur when, on or near the expiration date, the underlying shares do rise to or above the price represented by the call strike price. The assigned profit yield is calculated by subtracting the Stock's Price from the Strike Price., and then dividing by the Stock's price. (Also see Static Yield)

 

At-The-Money: A term that describes an option with a strike price that is equal to the current market price of the underlying stock.

Bid / Bid Price: The price at which a buyer is willing to buy an option or a stock. 

Break-even point(s): The stock price(s) at which an option strategy results in neither a profit nor a loss. While a strategy's break-even point(s) are normally stated as of the option's expiration date, a theoretical option pricing model can be used to determine the strategy's break-even point(s) for other dates as well.
 

Buy-write: A covered call position in which stock is purchased and an equivalent number of calls written at the same time. This position may be transacted as a combined order, with both sides (buying stock and writing calls) being executed simultaneously. Example: buying 500 shares XYZ stock, and writing 5 XYZ May $60 calls. 
 

Buy to Close: The action of closing out a short option position, such as a covered call, or a cash secured put.
 

Call option: An option contract that gives the owner the right to buy the underlying security at a specified price (its strike price) for a certain, fixed period of time (until its expiration). For the writer of a call option, the contract represents an obligation to sell the underlying stock if the option is assigned.
 

 

 

Cash Secured Puts: Selling cash secured puts is an option strategy in which a put option is written against a sufficient amount of cash (or T-bills to pay for the stock purchase if the short option is assigned).  The put seller is obligating himself to potentially buy the underlying stock at a given strike price and expiration date, in return for receiving a put option premium.  If the stock declines below the strike price at or near the put option's expiration date, the stock will be assigned/sold to the put seller at the strike price.  Example: If you sell 1 July $20 put option for stock "ABC" at $2.00, and stock "ABC" goes to $19.00 near or at expiration time on the 3rd Friday of July, you'll be assigned/sold 100 shares of stock "ABC" at $20.00. However, your break-even cost is only $18.00, (the $20 strike price minus the $2.00 put premium you were paid for selling the put.) 

 

 

Day order: A type of option order which instructs the broker to cancel any unfilled portion of the order at the close of trading on the day the order is first entered. 

 

Exercise/Strike price: The price at which the owner of an option can purchase (call) or sell (put) the underlying stock. Used interchangeably with striking price, strike, or exercise price.

 

Expiration Date: The date upon which an option contract will expire. For US options, this is usually after the market close on the 3rd Friday of the month. The options clearing house then settles all open contracts, and, the brokers, in turn, post any purchases or sales resulting from call or put assignments, into the retail customers' brokerage accounts, on Saturday/Sunday of that weekend.

 

Greeks: The Greek letters names that refer to various parameters that go into pricing an option, such as Theta for time value, Delta for price change, Gamma, Vega, etc.

 

Historic volatility: A measure of actual stock price changes over a specific period of time.

 

 

Implied volatility: The volatility percentage that produces the 'best fit' for all underlying option prices on that underlying stock. The market’s expected volatility for a stock or index.

 

In-The-Money: An adjective used to describe an option with intrinsic value. A call option is in the money if the stock price is above the strike price. A put option is in the money if the stock price is below the strike price.

 

Long-dated options: In English, this means calls and puts with an expiration as long as thirty-nine months. Some equities have two LEAPS series at any time with a January expiration – Jan. 2013, Jan. 2014, Jan 2015, for example.

 

Open Interest: The number of option contracts that are open/unsettled at any given time. Stocks with heavier volume tend to have larger open interest.

 

Option: A contract that gives the owner the right, but not the obligation, to buy or sell a particular asset (the underlying stock) at a fixed price (the strike price) for a specific period of time (until expiration) . The contract also obligates the writer/seller to meet the terms of delivery if the contract right is exercised by the owner. 1 option contract corresponds to 100 shares of the underlying stock.

 

Option period: The time from when an option contract is created by a writer of that option to the expiration date; sometimes referred to as an option's 'lifetime.'

 

 

Out-of-the-money: An adjective used to describe an option that has no intrinsic value, i.e., all of its value consists of time value. A call option is out of the money if the stock price is below its strike price. A put option is out of the money if the stock price is above its strike price.

 

Premium: Total price of an option: intrinsic value plus time value.

 

Put option: An option contract that gives the owner the right to sell the underlying stock at a specified price (its strike price) for a certain, fixed period of time (until its expiration). For the writer of a put option, the contract represents an obligation to buy the underlying stock from the option owner if the option is assigned.

 

 

Sell to Open: The action to specify when opening a short option position, such as selling a covered call.

 

Settlement: The process by which the underlying stock is transferred from one brokerage account to another when equity option contracts are exercised by their owners and the inherent obligations assigned to option writers.

 

Static Yield:  In a Covered Call options trade, the combination of the dividends and call option money received, divided by the cost of the underlying stock.

 

Time decay: A term used to describe how the theoretical value of an option 'erodes' or reduces with the passage of time. Time decay is specifically quantified by theta.

 

Volatility: A measure of stock price fluctuation. Mathematically, volatility is the annualized standard deviation of a stock's daily price changes.