Bond replacement investments – selling covered calls and cash-secured puts – represent a popular, but often misunderstood class of option investments. Most investors untrained in options fail to properly frame these strategies correctly, and often lose out in the process.
This 14-minute video first takes a look at tactical issues involved in structuring a bond replacement investment and lays out the two key elements an investor should focus on to maximize returns and minimize risk.
Next, we take a step back to take a more strategic view of bond replacement strategies and discuss how bond replacement transactions might function within an income-producing investment portfolio.
We finish up by doing a quick run-through of the monthly IOI Covered Call Corner screen, and show how this worksheet aids investors on the tactical and strategic level to make actionable investment decisions.
Given the popularity of covered calls, we are in the midst of designing a longer, more in-depth mini-course on bond replacement investment structures, but this video will at least help you start to see these useful strategies in a new light.