Covered Call Income
The Covered Call Income SMA strategy seeks income and growth of capital from the sale of covered call options on high-quality U.S. large capitalization equities. Stocks are purchased while call options are written/sold out-of-the money with the intention of the stocks being called away by expiration.
The sale of covered calls increases the portfolio’s income but limits the profit potential to the strike price written on the calls at the beginning of the process.
Covered Call Income SMA Strategy Highlights
Seeks cash flow through option premiums, short-term capital gains, and dividends.
Short-term focus can pair well with traditional long-term strategies.
Active management of this SMA focused on mitigating downside risk of individual companies.