Wall Street’s record rise spurs growth of covered call strategies
For investors with portfolios of individual company stocks, Wall Street’s record-breaking rise is boosting the attractiveness of an options strategy that helps them hedge single stock risks while earning some income as they diversify their portfolios.
While the use of covered calls is not new, portfolio managers said they are finding growing adoption of the strategy among individual investors with large positions in big tech stocks, baby boomers and corporate executives with legacy holdings gained from being paid in company shares.
One way advisors and managers are approaching the growth of their clients’ single stock exposure is by using customized covered calls that let investors slowly sell out of stocks and diversify their…
