Liquid Strategies | Insights

White Paper - The Hidden Cost of Covered Call Writing

Written by Shawn Gibson | Dec 15, 2020

Covered call writing is touted as a conservative way to generate additional income from an equity portfolio while still allowing investors to participate in market appreciation and dampen downside risk and volatility. The purpose of this paper is to help investors make more informed decisions by better understanding the limitations and risks of covered call writing.

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The assertions and statements in this blog post are based on the opinions of the author and Liquid Strategies. The examples cited in this paper are based on hypothetical situations and should only be considered as examples of potential trading strategies. They do not take into consideration the impact that certain economic or market factors have on the decision making process. Past performance is no indication of future results. Inherent in any investment is the potential for loss. Options involve risk and are not suitable for all investors. Please see the following options disclosure document (ODD) for more information on the characteristics and risks of exchange traded options.