Ray Di Bernardo appears on Animal Spirits Podcast


With elevated market volatility and all major stock indexes down double digits, the environment in 2022 has been conducive to covered call strategies. Portfolio Manager Ray Di Bernardo joined the Animal Spirits Podcast to discuss the covered call investment style and Madison’s approach to building an equity income portfolio that minimizes risk.

In the episode:

  • How covered calls work
  • Single stock vs. index options
  • Addressing risk with covered calls
  • Ray’s outlook for stocks
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The writer of a covered call option forgoes, during the option’s life, the opportunity to profit from increases in the market value of the security covering the call option above the sum of the premium and the strike price of the call, but has retained the risk of loss should the price of the underlying security decline. The preceding examples are based on American-style options. Other variations exist.

Diversification does not assure a profit or protect against loss in a declining market.

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For more information on options and related risks, contact your financial advisor and review the Options Clearing Corporation “Characteristics and Risks of Standardized Options” available at www.theocc.com.

S&P 500® is an unmanaged index of large companies and is widely regarded as a standard for measuring large-cap and mid-cap U.S. stock-market performance. Results assume the reinvestment of all capital gain and dividend distributions. An investment cannot be made directly into an index.

CBOE S&P 500 BuyWrite Index (ticker: BXM) is the passive representation of a covered call strategy. The BXM Index is an unmanaged (passive) total return index based on buying the S&P 500® stock index portfolio and “writing” (or selling) the near term S&P 500® Index “covered” call option (SPX) every month with an exercise price just above the prevailing index level (i.e., slightly out of the money). Source: CBOE