Selling Covered calls is a great strategy to help you create consistent cash flow from the stock market. It can significantly help you to increase the return of just buying and holding.

So what are the advantages?

1. It gives you cash Flow

By selling calls on a stock every month you can create a somewhat consistent cash flow from that stock. Selling options is the only way to create an income from the market that is consistent and covered calls are the safest ways to sell them.

2. Help you During Down Times

If you own a stock and just hold it for the long term, eventually that stock will have a rough time. It is pretty hard to see one of your investments take a dive. But by selling calls on that stock you can recapture some of the losses that occur during a bears market, poor earnings, or just downward pressure.

3. Easy to manage

As far as trading goes covered calls are very easy to manage. All you have to do is sell a call on your stock and wait until expiration day. You do not have to manage the trade by constantly monitoring it and adjusting stops.

It is also a lot less stressful then something like swing trading which can really be hard to handle emotionally at times, especially for new traders.

4. The Returns are pretty Good

There are times when it is possible to get a 5% return or more in a month by selling calls on a stock. It would take a whole year for you to get that kind of cash flow from dividends.

For more on covered calls visit http://www.stocks-simplified.com/covered_calls.html

For some times to avoid selling covered calls visit http://www.stocks-simplified.com/Selling_covered_calls.html

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