There is a conservative strategy involving listed equity options that many professional and individual investors are using today to generate income, achieve total return, and partially protect individual stock positions in an uncertain market. It is called Covered Call Writing. This strategy allows you to generate cash, participate in an upward move in the stock up to your predetermined price ("strike price"), while simultaneously providing yourself with limited protection from a decline in the value of your stock position.

Covered Call Writing is generally considered a conservative and reliable investment strategy and is appropriate for investors who are:

• Neutral to bullish on the underlying stock position
• Interested in generating cash (income resulting from option premiums)
• Interested in reducing volatility in a portfolio
• Willing to give up ownership of the underlying stock at the strike price of the call
• Looking for limited downside protection

In exchange for the right to buy your stock, someone will pay you a premium up front. You keep this premium regardless of what happens to your stock.
If the price of the stock is above the strike price of the covered call at expiration, it is bought by the long holder of the call at the strike price, and you receive the proceeds.

If the stock is not above the strike price at expiration and the call expires worthless, you keep your shares of stock as well as the premium you originally received. If the price of the stock should drop, your loss in value is partially offset by the amount of premium you have received in selling the covered call.

To learn more about Covered Call Writing or other options strategies, please call me today.

Prior to transacting in listed options you should consult with your financial advisor about all of the potential risks and benefits of such a strategy. This literature does not purport to be a complete description of the securities markets or any risks associated with trading options. Since options strategies involve unique risk considerations, tax consequences, and commission costs, options are not suitable for all investors. When participating in a covered call strategy, the investor is at risk of having to sell the stock if the stock’s price rises above the strike price. Remember, in exchange for receiving the premium of having sold the calls, the investor is obligated to sell the stock if the option is exercised. This material must be preceded or accompanied by a copy of Characteristics and Risks of Listed Options, given to you by your advisor or by Stephen Gow at Riverfront Plaza - West Tower, 901 East Byrd Street, Suite 300, Richmond, Virginia 23219. Finally, you should consult a tax expert regarding any potential tax implications involved with any potential options strategy prior to placing a trade. Supporting documentation will be provided upon request.

Scott & Stringfellow and its representatives do not provide tax or legal advice. You should consult your individual tax or legal professional before taking any action that may have tax or legal consequences. Investment Advisory Services are offered by Scott & Stringfellow a Registered Investment Advisor.