Here he shows us covered call strategy investing and how it works.

This from Karim:

Just what is the best way to profit in a stock market like this?

Our mission here is not only to show you the sectors, industries, and stocks that are set up to fare well, and the trends you can play to your advantage, but to also show you how to profit from them in more advanced, sophisticated ways than ordinary investors.

And when I say “advanced” and “sophisticated,” I don’t mean “complex to understand” and “difficult to execute.” Far from it.

In recent columns, we’ve talked about investing in water, gold investments, the real estate market, and much more (check out our Smart Profits Report archives if you’ve missed anything).

The bottom line is that amid all the bailout and stimulus talk… the volatility… the fear… the constant doom and gloom… we continue to stress that there are ways to negotiate brutal bear markets – ways that can still bring in strong profits.

Covered call investing is one of them…

Covered Calls: The Perfect “Cover” For An Imperfect Market

We realize that times are tough. No doubt about that. But we’re not sitting around complaining about it. Our focus, as always, is purely on showing any investor how to take profits from any market.

And we’ve demonstrated that in recent weeks, due in no small part to our covered call strategy.

Now, before I go any further… I understand that options strategies can sometimes spook investors. They seem complicated, especially since most people are used to just buying and selling stocks.

But our job is to educate you… helping you become a smarter investor, able to take bigger profits…

2 Key Elements That Will Help You Beat Wall Street…

In some ways, Wall Street is like the world’s biggest casino.

The devious types who make their living there don’t want you to know about the tips and techniques that can help you win.

They’re perfectly happy for you to remain in the dark, unwilling to teach you about hedging your bets. They just want you to make them and grab your money.

Now, in some cases, I’ll be the first person to admit that hedging your bets is a flat-out bad idea. However, this is not one of those cases. And I’ll tell you why…

This type of market, complete with its daily volatility and blow-ups, requires that you expand your investing acumen. And this is where we come in, giving you the two key elements you need…

1. The necessary know-how.
2. The specific trades to take end-game profits.

Covered Call Buyers vs. Covered Call Sellers… Who Wins?

Using options does not mean gambling. If you’re relatively new to the options world, that’s the first fallacy you need to put aside. Options actually work very logically. With every buyer, there’s a seller.

The Buyers: 9 times out of 10 – especially with short-term options trading – buyers lose out. And with good reason: It’s like trying to predict where a stock will go in a couple of weeks or months – something that nobody is entirely capable of doing.

The Sellers: Options sellers, on the other hand, usually make money because they’re basically betting on this lack of supreme knowledge. Huh… how does that work? Simple…

While they acknowledge that they can’t predict where an index or stock will go with pinpoint accuracy, they at least want to try by making a well-informed, educated estimate. And they want to get paid for trying and waiting around. In particular, with deep-in-the-money covered call selling or put-selling, they want to own the underlying shares, but at a price that they specify.

I’ll give you an example…

Using Covered Calls To Invest In Gold

As we’ve written about here before, we liked gold investments when no one else did. So we put our money where our mouth was and bought shares in Goldcorp (NYSE: GG), a major gold producer.

But we were also aware that gold prices would likely remain volatile for a time, keeping shares from reaching our targets right away.

So what to do?

Easy. We bought the shares and sold call options against our position. This not only reduced our cost, but also gave us a quasi-dividend and increased our chances of a win.

In the end, our shares didn’t get called away from us at options expiration. But that was fine with us. We got another opportunity to lower our cost and increase our potential for a win by selling more calls.

We did the same with a recent trade in the Xcelerated Profits Report – and I’ll be doing it again very shortly. In this market, it’s how you play the game that counts. It’s all about risk management.

The Covered Call Investment Strategy – A Gateway To Safer Profits

In case you don’t know, we have the resources for you to learn about the covered call investment strategy (and several others, for that matter) in more detail on our Smart Profits Report website.

Scan our archives. It’s all free and essential reading if you’re serious about investing. We provide step-by-step instructions on how to execute various trades, as well as the rationale behind them.

And if you find something you really like, why not take your investing to the next level?

Source: Kiss Goodbye To “Ordinary” Investing: Why Smart Investors Use Covered Calls

Platinum rose in Europe, but then traded dead flat through the whole New York day, ending at $2006/oz., up $7. For the week, platinum shed 7.6%.

Like gold, silver bottomed at the London open and rallied through the NYMEX, then traded flat to close at $16.87/oz., up 27 cents. For the week, silver plunged 7.3%.
(Click here for charts)

It was a bit of a relief for the precious metals fanciers, as the objects of their affection ended a dismal week on an up note.

The metals got a boost from the usual suspects, albeit a small one, as the euro inched higher against the dollar and oil rebounded to claw its way higher.

Some analysts were attributing Friday’s gold action to a technical bounce, but others were of the mind that that the improved macro economic outlook could have generated a bit of bottom fishing. The day’s data, while mildly positive, was not good enough to send the dollar markedly higher and slam gold again.

However, the week’s oil price volatility does leave some nagging questions to overhang the gold market heading into Monday’s trading.

Noting that yes, there was “a sharp sell off due to profit taking, dollar strength and oil weakness,” Mark O’Byrne, of Gold and Silver Investments Ltd., went on to write that, “these would seem to be short-term phenomena and the primary trends in oil and the dollar remain up and down, respectively, which should result in gold being well supported above $850 per ounce.”

O’Byrne concluded by saying that, “Inflation and stagflation are now stalking developed western economies and developing and emerging markets alike — and this bodes well for gold in the long term as it was in the 1970s.”

Meanwhile, silver remained in the lower segment of its May price range as copper, which it often follows, continues to struggle. Analysts remain concerned about the delicate balance engendered by the slowing economy.

On the one hand, the slowdown will keep a lid on the dollar, which is positive for all precious metals, but on the other, if the slump is too deep or prolonged, silver, as an industrial metal, will suffer.

Source: Gold, Silver End Week on an Up Note – Bounce May Have Been Technical, Tho. 

Platinum also tried to recover its European losses during the New York day, but fared less well than gold, ending at $2069/oz., down $46. Overnight, platinum is sharply lower.

Silver tracked gold very closely, but staged a more impressive rally in New York that carried it nearly back into the black for a close at $17.41/oz., down a penny. Overnight, silver has fallen further.
(Click here for charts)

A pretty lackluster day for the precious metals, especially considering that rising oil prices were there for support. But traders obviously felt that a modest advance for the dollar was of greater importance.

That the metals also came well off their lows was also encouraging, but the relationship between gold and crude continues to be double-edged as oil acts both to support the gold price and to cap it.

As Kitco’s Jon Nadler wrote: “Gold remains on the defensive for the moment, as it is lacking core fabrication demand and more attention from investors … The latter continue to be attracted to oil like insects on a May evening.”

Nevertheless, that is a reversible phenomenon, according to Mark O’Byrne, of Gold and Silver Investments Ltd.

O’Byrne writes that “gold is likely to outperform oil in the medium to long term … Strong physical demand internationally is likely to cushion the sell-off and result in gold finding strong support again between $850 and $870.”

But Leonard Kaplan, president of Prospector Asset Management in Evanston, Illinois, makes the pessimists’ case, saying that “inflationary expectations are too high and the Fed can’t live with this. Interest rates are going to be rising and everyone will get out of commodities.”

Whether gold must fall with rising interest rates remains to be seen, but futures traders are increasingly betting on that rise, with the market showing a 43% chance the Fed will raise borrowing costs to 2.25% by December 16, compared with a 38% chance a week ago.

Source: Gold, Platinum Slide

Silver for immediate delivery fell 24 cents, or 1.4 percent, to $17.19 an ounce in London. The metal will trade at $17.20 in one month and $16 in three months, UBS forecast.

“Rising supplies are forecasting a sizable silver correction,” says Eric Roseman in The Offshore A-Letter.

“Thus far in 2008, gold prices have risen just 8% while silver has rallied 15%. The fundamentals, however, don’t support silver’s higher returns this year. Silver remains a viable long-term speculation. But it’s not primarily a monetary metal and worse, supplies are no longer in deficit.”

However, the outlook for platinum is much brighter, says Roseman: “Platinum is by far the only precious metal threatened by a severe shortfall in production in 2008. Prices could double over the next 12-24 months.

“South Africa, where most of the word’s total platinum supply is mined, continues to suffer from severe production bottlenecks. Strikes, power outages, a plunging rand and soaring input costs have hammered platinum production since 2007.”

Silver investors shouldn’t panic, however, says Doug Casey in Casey Research.

“The beginning of another correction? No, says Mark O’Byrne, of Gold and Silver Investments Ltd., who wrote that, ‘Gold was up 3% last week and silver surged nearly 8%, and thus profit-taking would be expected in the early part of this week.’”

Platinum seesawed through a $40 range, winding up in the middle of it to end at $2151/oz., up $23. Overnight, platinum has been flat.

Silver peaked at $17.25 shortly before the New York open, was off precipitously from there until late morning, then rallied back to the $17 mark before being knocked lower in the Globex to close at $16.95/oz., up a penny. Overnight, silver has been trending higher.
(Click here for charts)

Although silver disappointed, gold held onto its gains from late last week and added a bit more, while platinum continued to soar. Gold’s rise to its highest point in three weeks was noteworthy in that it got no help from the U.S. dollar, which strengthened, although the rising price of crude was supportive.

“There is a definite air of the 1970s in recent economic data and the reality of falling economic growth and rising inflation or stagflation,” said Mark O’Byrne, of Gold and Silver Investments Ltd.

Because of that, “With the dollar having strengthened against the euro, the prime reason for gold’s early strength looks to have been inflation hedging buying due to oil going above $127 prior to a small sell off,” O’Byrne wrote.

Gold may not hold above $900, said O’Byrne, as “profit taking is to be expected.” In the near term, “Gold needs to consolidate between $885 and $915 before the next leg up in the bull market,” he concluded.

Perennial skeptic Jon Nadler of Kitco chipped in by writing that gold may be “on a possible route to tests of $915 and maybe $925,” as speculative fund buying gives the metal a boost.

But Nadler added that, as gold prices firmed overnight, “demand in India dipped once again and local prices went to a discount as buyers failed to materialize.”

Meanwhile, global platinum supplies weren’t enough to meet demand in 2007, platinum group metals refiner Johnson Matthey said yesterday. Demand climbed by 8.6% to 7.03 million ounces in 2007, but supply came in at only 6.55 million, leaving a deficit of 480,000 ounces.

Investment demand for platinum climbed 170,000 ounces in 2007, with the launch of two platinum-based exchange traded funds contributing 195,000 ounces to demand for the first time, Johnson Matthey said.

Source: Gold Hangs Onto Its Gains