While the collection of option premium might supplement the returns, the primary driver of a covered call strategy will most likely be simply the upward or
downward movement in the stock price.
It is convenient for active traders who have their eyes glued to trading and even
minor movements in stock prices can make a huge difference in their overall portfolio profitability.
In general unless there's a big change in the landscape (such as in late 2008) most companies pay out about the same dividend each time, and changes to this are sometimes seen by some as «indicators» of company health and such news can result
in movement in the stock price.
Many mutual funds are sector specific, so owning a telecom or healthcare mutual fund means you are diversified within that industry, but because of the high correlation
between movements in stocks prices within an industry, you are not diversified to the extent you could be by investing across various industries and sectors.
Horizons recently launched two new Exchange - Traded Funds (ETFs) that provide passive exposure to the Canadian and US stock markets while overlaying an active options strategy that seeks to take advantage of sudden
downward movements in stock prices.
In the grand scheme of things, a dime's
movement in a stock price may not be much to get excited about — ...
Stop looking for validation of your long - term investment premise in the daily, mostly random,
movements in stock prices.
That means
any movement in those stock prices, affects net income whether BRK sells any shares or not.
When used in the sense of investing, momentum refers to
movement in stock prices.
Movements in the stock price will change the dividend yield.
The fundamentals taught us what fair value should be, but the technicals taught us how investors would react to
movements in the stock price.