Practical analysis for investment professionals

covered calls


Derivatives Roundup: Simple, But Not Simpler

Could the derivatives market finally be listening to Albert Einstein? As you may recall, Einstein famously stated, “Make everything as simple as possible, but not simpler,” and according to the Reuters article "Simple Options Thrive in Risky World," that is exactly what is happening. Simple, plain vanilla options that hedge risk are beating out the more exotic, custom-designed option structures.

Write or Wrong: A Flat Market Doesn’t Mean Flat Returns

The world is flat, or so people thought, until enterprising Greek philosophers challenged the notion in the 6th century BC. More than 2,000 years later, Ferdinand Magellan made a practical demonstration of that fact when he circumnavigated the globe. Although stocks in 2011 sailed through periods of sunshine, wind, and rain, many equities markets ended up flat just the same. Nonetheless, some investors proved that it is possible to make money in this market — and they did so writing covered calls.



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