It's Best to Set Sail with Shippers Guided by Options!

Of all the sectors ravaged by The Great Recession, shipping SEA was among the hardest hit. To note that the phrase "perfect storm" was overused in describing what happened to shippers is a vast understatement. The exchange traded fund for shipping, Guggenheim Shipping SEA, now under $22.50, was near $30 a share in July 2010. Shipping stocks such as Baltic Trading BALT, Frontier FRO, Nordic American Tankers Limited NAT, and many others all plunged, too. But now many are rallying. That brings up the natural questions for investors: is it safe to get back in the waters? The answer is "yes". But it is best to do it by writing covered call options. Covered call options are when the owners of shares of Baltic Trading, Frontier, Nordic American Tankers and other shipping stocks sell, or "write," options on the stock. From this, the shareholders make money in 3 ways: by selling the option, pocketing the dividend, and then the capital gains if the option is exercised. Dr. Joseph Louro, founder of Investview INVU, an investor education and financial technology firm, advises that the great majority of options are never exercised. That is a major part of what makes writing covered call options a low risk way to profit for shareholders! This is ideal for the shipping sector. There is still a great deal of weakness in the sector. But "Big Money" such as hedge funds, private equity groups, and other institutional investors are starting buy shipping assets. For individual investors, that creates an ideal opportunity for writing covered call options!