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

Article Source: http://EzineArticles.com/?expert=Shaun_Rosenberg

After almost two-year bull market, the benchmark Shanghai Composite Index, which tracks both A and B shares, recorded a dismal performance since October 2007. In 2008, The Shanghai Stock Exchange (SSE) suffered an annual loss of over 60%, plunging 2560 points and being the worst performing market in Asia. No doubt, the primary mission of the SSE is to maintain stability in market development. Trading security and smooth operation of the market, the construction of blue chip market, market trading mechanism, product innovation such as the SHSE-SZSE300 Index ETF, and the bond market are among the priorities.

Shanghai, a city historically with deep ties to the western world, has been an international business center, but the Chinese capital market in some ways is still relatively isolated from the international markets. To fulfill China's goal to build Shanghai into an international financial and shipping center by 2020, Shanghai is taking steps to develop more sophisticated investment products, offer favorable tax policies to attract international investors, build a multi-layered financial market system, and promote the opening of financial services in the city. Investors embrace the idea of building Shanghai into an international financial center, which resulted in an instant Shanghai indext's 3.1% increase to 2361.70. One action to note is, for the first time ever, China will allow foreign companies to list in Shanghai. Foreign companies would be allowed to raise money through the Shanghai Stock Exchange and also to issue bonds in China. This could mean new territories for companies that are interested in extending their business to China or Asian markets. As the financial system of the third largest economy opens up and becomes more global, players of the financial world will become more interrelated.

China does not take this route without caution. To nurture start-ups, China has cautiously developed Growth Enterprise Market (GEM), which is an experimental, technology-based, Nasdaq-style stock market. Only more mature firms that have met requirements will be first listed. One can also judge by where GEM is planned to open, possibly in 2009: on the Shenzhen Stock Exchange. Shenzhen has traditionally been a test ground for new programs before they were rolled out to the broader market. Investors are cautious but remain interested, with vivid memories of the 2006/2007 SSE's over 300% gain as well as more than $3 trillion of loss in value from listed companies during the downturn; and it all happened when the Chinese economy still had a growth of 9% in 2008.

A growth of about 8% is widely expected. Investors keep a close eye on companies like Baidu (BIDU), China Mobile Ltd. (CHL), and both recently posted strong quarterly growth with warnings. Baidu reported a better-than-expected 23.5% increase in first-quarter net profits, but warned the global downturn was affecting online advertising including paid search listings, keywords, and ads on Baidu's pages. Holding over 60% of China's online search market share, Baidu, however, faces competitions from Google. China Mobile had a 5.2% first-quarter net profit increase, but warned about its slowing subscriber growth. On April 23, Baidu, the China search engine giant, has a market capitalization of 7.2 billion and a P/E ratio of 47.5x, and China Mobile, China's largest provider of mobile telecom services, 179 billion and a P/E ratio of 11x, although P/E multiples may not be as reliable in a downtime if forecasted earnings is used. In the territory of wireless technology, China's Ministry of Industry and Information Technology estimates that 170 billion yuan, or about $25 billion, will be spent on 3G networks in China in 2009. In 2009, China Mobile, will spend around 58.8 billion yuan, or US$8.6 billion in 2009 to build out its 3G network, while China Unicom (CHU) and China Telecom (CHA) will spend around 30 billion yuan, or US$4.4 billion each on building 3G networks. Two companies that are worth mentioning are Huawei and ZTE, which are winning contracts as China rolls out its 3G wireless technology, taking more market shares from their foreign competitors.

China's fiscal $586 billion stimulus and its planned spending of a third of the stimulus on railways, highways and power grids-related projects tends to benefit companies like China Zhongwang Holdings Ltd., Asia's largest aluminum-extrusion manufacturer by capacity, which has a railway compoent in its business and is promoting its IPO. Foreign investors are welcome in this market especially as joint-venture partners. China's government spending on infrastructure will certainly have an impact on some international players.

For information on business resources, stocks, real estate, business travel, culture and entertainment in Shanghai as well as shopping for Shanghai, China, or Asia related products and services, please visit http://shanghaipinnacle.com/

Article Source: http://EzineArticles.com/?expert=Bilu_Manzella