While covered call writing is considered a relatively straightforward strategy, most investors do not have the expertise or patience to efficiently implement a successful call writing program on their own. Too often, calls are written on an ad hoc basis seeking high premiums at the expense of maintaining potential growth and the program ends after several cycles with the stock being called away unexpectedly.
A managed covered call writing program provides significant value by introducing discipline and professional management into what is typically a series of “one-off” events.
In contrast to individual investors who often write only a few higher premium options, Recon Capital uses a portfolio of shorter-maturity and out-of-the-money options to reduce exercise risk.
Recon Capital’s Option Strategies are discretionary investment management services. This information generally describes how this strategy works, but it is not a complete description of the investment programs or service will perform. Past performance is not a guarantee of future results.
The sale of stock will produce tax consequences for U.S. taxpayers. Each option transaction also produces a tax consequence. Prior to undertaking Recon Capital’s option services, you should discuss with your personal tax adviser how the options transactions and any sales of underlying stock will affect your tax situation. Recon Capital does not provide tax advice.
Products and options are not suitable for all investors. Please ensure that you have read and understood the current options risk disclosure document before entering into any options transactions. In addition, please ensure that you have consulted with your own tax, legal and financial advisors prior to contemplating any derivative transactions. The options risk disclosure document can be accessed at the following web address: http://www.optionsclearing.com/about/publications/character-risks.jsp.