Tip #8:

Trade Options to Generate Regular Income

Anyone who owns at least 100 shares of a stock—or owns call options—can sell (write) covered calls.

If you write a $20 Call priced at $2 per share, you would receive $200 in your account. ($2 x 100). This is, in effect, an insurance policy with $200 worth of downside protection. If shares drop 2 points (or $2), your option income covers your stock loss. So as long as the stock trades fairly flat, covered calls can put the stock to work harder for you and enable it to generate income for you even though shares are stagnant!