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may elect to soon put the brakes on their buyback plans. If that were to occur, investors would surely recognize that liquidity, volume, and prices would drop, further exacerbating a stock market decline and potentially protracting a downturn

Another byproduct of a stock buyback suspension is its impact on financial reporting. When a company buys back its shares in the open market that stock is returned to its treasury and the number

umber of shares outstanding is reduced by that number. So, when a company reports financials that demonstrate a decline in shares outstanding from the year-ago pe

riod, EPS could be raised not by operating performance but simple math. Fewer shares in the share count results in a higher earnings per share. Once a buyback plan is suspended, that incremental EPS gain is lost, making it harder to outperform EPS recorded in prior periods.

Most small cap investors and traders do not think of options when buying or selling stocks in the small cap space and there is generally lot of fear inappropriately associated with the word ‘optionsMost small cap investors and traders do not think of options when buying or selling stocks in the small cap space and there is generally lot of fear inappropriately associated with the word ‘options

The fact is that option strategies can be used in a simple way to generate income for short-term – intermediate-term holdings which can add to returns. How? Use covered calls. It is not as difficult as it sounds.

For those not familiar or those needing a review here is what is involved simplest terms:⇒Buy 100 shares of stock XYZ⇒Sell 1 Call Contract of stock XYZ (1 contract = 100 shares of underlying security)

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After the transaction, the investor will own the stock and generate the income of the trade price of the option contract. One crucial element to remember is that 1 contract equals 100 shares of the underlyin

tock. So, the investor needs to buy 200 shares for 2 contracts, 300 for 3 contracts, etc. to cover the total number of call contracts.

A sound tactic is to sell ‘out of the money’ calls at a

strike price equivalent to what you are willing to take profits and sell the underlying security. This mechanism is automatically in place, as the buyer of the call could ‘exercise’ or buy the stock from the contract if it moves above the strike, which is in essence your target price.

As a result, the worst-case scenario is that you sell the stock at your low-end target price and the best-case scenario is that you generate income from the call option sale, enhancing your return on investmen

We recommWe recommend incorporating the following criteria when using a covered call strateg⇒Buy stock with price under $10end incorporating the following criteria when using a covered call strategy.⇒Buy stock with price under $10

Stock has demonstrated upward momentum with at least 25% increase off of 52-week low⇒Technical Analysis illustrating short, intermediate, and long term bullish indication

Consensus Analyst Opinion of Buy or Better⇒Out-of-the-money strike price at least 6 months from expiration and above $50 premium for sale. (Remember premium from sale = ask price x 100