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Can You Use Stocks For Bond-Like Returns?

One way to increase your cash flow from owning stocks is to write an in-the-money covered call on a dividend stock. Last week, a trader sold a call on AT&T (T) that was below the stock price and doesn’t expire until next January.

The purpose of the trade is to collect premium from the call while also being able to capture the next couple dividend payments. The returns are more bond-like in nature than traditional equity returns.

Watch this short video.

This post originally appeared at Investors Alley.