Make More Income On Stocks You Already Own with Covered Calls

I’ve always been a “buy the dip” guy.

I look for deals, and I buy when other people are selling, usually to sell those shares right back for a quick profit. I’ve done this so many times that it’s difficult for me to just purchase shares and relax, because I feel like I can always be making small profits after buying on red days, so I like to keep liquidity in my portfolio for these opportunities as opposed to having my money tied up in long term holds.

Sure, I still do research on the stocks that I trade, but if the stock has a huge run up, I usually miss out.

I was always okay with this, but over the years I started to notice how some of my picks would run up so much higher than I was expecting, and I continued to think what could have been. Recently, I’ve noticed some of the returns on my former favorite stocks were so ridiculous, that just holding the shares that I had for any one of them would have been much more profitable than my current strategy.

Even after realizing this, it was hard to get over the “take your profits” approach that I’d been using for years, and although this strategy works really well when your picks aren’t doing so hot, it underperforms when they are.

Recently, I found that one of my favorite stocks was dropping pretty consistently, and I continued to buy the dip. The price didn’t fall all that much, but it was such a gradual decline that I found myself getting a large portion…