charts look for shares that are moving in channels sideways, perhaps have hit some resistance - we do not want highly volatile stocks either ( you will need to become familiar with volatility - both historic and implied ) -the whole point of the strategy isThe buy write covered call is a slightly different strategy from the over write strategy, although the mechanics are identical in terms of outcome and follow on actions. The difference is in the strike price you choose and the period. In a previous article using the over write strategy, we looked at an example using British Airways, a UK share, but one which only had quarterly options available. There are some heavily traded UK equity options which are available monthly, but most UK options tend to be quarterly as the market is much smaller.

In the US, because the market is enormous, most stock will have monthly options and therefore I find this strategy lends itself better to the US markets. The stocks you are looking for are those that are trending sideways. Remember the idea with all call writing is to find a stock that you can write an option on which will then expire worthless, allowing you to repeat the exercise. You do not want shares or stocks that are shooting skywards!!!! - when you are looking at your charts look for shares that are moving in channels sideways, perhaps have hit some resistance - we do not want highly volatile stocks either ( you will need to become familiar with volatility - both historic and implied ) -the whole point of the strategy is

sing the over write strategy, we looked at an example using British Airways, a UK share, but one which only had quarterly options available. There are some heavily traded UK equity options which are available monthly, but most UK options tend to be quarterly as the market is much smaller.

In the US, because the market is enormous, most stock will have monthly options and therefore I find this strategy lends itself better to the US markets. The stocks you are looking for are those that are trending sideways. Remember the idea with all call writing is to find a stock that you can write an option on which will then expire worthless, allowing you to repeat the exercise. You do not want shares or stocks that are shooting skywards!!!! - when you are looking at your charts look for shares that are moving in channels sideways, perhaps have hit some resistance - we do not want highly volatile stocks either ( you will need to become familiar with volatility - both historic and implied ) -the whole point of the strategy is

as the market is much smaller.

In the US, because the market is enormous, most stock will have monthly options and therefore I find this strategy lends itself better to the US markets. The stocks you are looking for are those that are trending sideways. Remember the idea with all call writing is to find a stock that you can write an option on which will then expire worthless, allowing you to repeat the exercise. You do not want shares or stocks that are shooting skywards!!!! - when you are looking at your charts look for shares that are moving in channels sideways, perhaps have hit some resistance - we do not want highly volatile stocks either ( you will need to become familiar with volatility - both historic and implied ) -the whole point of the strategy is

. Remember the idea with all call writing is to find a stock that you can write an option on which will then expire worthless, allowing you to repeat the exercise. You do not want shares or stocks that are shooting skywards!!!! - when you are looking at your charts look for shares that are moving in channels sideways, perhaps have hit some resistance - we do not want highly volatile stocks either ( you will need to become familiar with volatility - both historic and implied ) -the whole point of the strategy is charts look for shares that are moving in channels sideways, perhaps have hit some resistance - we do not want highly volatile stocks either ( you will need to become familiar with volatility - both historic and implied ) -the whole point of the strategy is NOT to be exercised. When you become more familiar with these things you will see that volatility and premium price are intertwined. It is obvious when you think about it - if a share moves violently all over the place it has a much higher chance of achieving the strike price and therefore will have a higher premium. This is particularly true on the US market - in the UK it is not so bad as those quoted are mainly FTSE 100. Please be careful, there are some real horrors. I would strongly suggest that you stay away from those in the pharmaceutical sector for example, as a new drug or a drug withdrawn can have dramatic effects on the stock price.

So, we are looking for stocks with relatively low volatility, and preferably in the top 500 -1000 US companies by market capitalisation. They should be moving sideways on the charts in a channel in a neutral to slightly bullish trend ( after all you don't want to be buying a stock that you should be shorting!! ). Having identified possible candidates you then check their