Systematic Covered Writing

Assuming the goal of investing is to generate a profit, there are two events that must take place whenever the investment process begins with 'buying' something. The equity purchased may be an individual stock, a mutual fund or even an option. The two events that must take place in order to realize a profit are as follows:

· The price (value) of the stock, mutual fund or option must increase above the purchase price.

· The position must be liquidated at the elevated price in order to actually 'realize' the capital gain.

If one of these two 'ifs' fails to happen, then there will be no profit generated. This method of investing could easily be described as 'IF INVESTING'. IF, the equity that is purchased goes up in value and IF that equity is sold at the higher price, a profit will be realized.

(Dividends are ignored in the scenario described above.)