The past year has been good for the S&P 500: it’s up about 15.7%, including dividends.
So if you’re simply tracking the index through an exchange traded fund, congrats. That’s a decent gain.
But I’ve got one simple trick—and a far superior fund buy—that can help you do even better … and grab a big chunk of your gain in cash, too.
That trick? Covered calls.
Covered calls are a strategy in which investors buy stocks and sell call options against those stocks.
Think of call options as a kind of insurance; investors buy them if they are short the market and want to protect themselves from blowing up in case the market rallies. If you sell those options to investors, you’re essentially becoming an insurer, giving these gamblers the protection they crave to cover their risky bets. …