The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we're going to be answering the question, “Are covered calls safe for investors to trade?” Now, covered calls being safe for investors to trade is a relative question. Safe compared to what? Say at not trading at all? Safe compared to a credit spread, compared to an iron condor? What are we basing this off of? I want to start this podcast by saying that I think we should base this particular question off of just trading regular long stock. Should we trade a covered call or should we trade regular stock and not include the option contract? What we know from a lot of research that using covered calls is a great way to reduce the cost basis of stock ownership. You’ve often seen this in CBOE studies, as well as the studies that we've put out here at Option Alpha and we do have some new research that shows that in some cases, using covered calls actually might not be the best use of your capital and you might (using