Yong-Long Lai

I go to moneycentral.msn.com and install the deluxe screener!

• First I do a simple filter to find the most profitable stocks
• I now add my favourite stocks that are not from the above filter
• I go down the list and look at the charts of the top 25 stocks – looking for support levels
• I look at the covered call returns of the short list – under optionsXpress – chains (i’m looking for returns of over 3%)
• while i’m looking through the short list, I also have a look at the volatility view to see if their implied volatility is higher than the 30 day historical volatility (ie. people are over paying for the options… meaning its good time to rent)
• depending on my list of stocks, I may use the screen on optionsXpress to find more for the short list
• Lastly, from my final short list I read up news on google.finance or other news website and will be left with my final list
• Tomorrow when the market open i’ll get prices and see which one has the highest return with the lowest breakeven and I usually go for a mixture depending on my feeling on the market (for tomorrow, i’ll be cautious of the market so i won’t be chasing returns and will be looking for lower breakevens)

You can spend more time looking through the analyst ratings, earnings estimates and all those random stuff on moneycentral if you have more time. Just make sure you don’t get into analysis paralysis!!

This is just an insight of the process I go through to pick stocks for covered calls