Finding a legitimate covered-call candidate in this market isn't easy. The
strategy is generally used to generate additional income for a stock position.
An example of this is to buy stock and sell a call option against the stock
position. Generating income from buying and holding stocks has been a challenge,
but a good thing about a covered call is that it offers some downside protection
as well, and in this market, an investor might just need some. The key is to
find a stock with solid fundamentals behind it. Bed Bath and Beyond (NASDAQ:
BBBY ) looks like a nice candidate. Its first-quarter earnings were up 38% and
had a 10% sales increase. The stock has had a couple of rough patches in the
last couple of years, but it seems like it has always found a way to climb
higher.
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