5 Option Income Ideas With 10% Yield Potential and High Margins of Safety

The Downside of Dividend Stocks Don't get me wrong, I like stocks that have nice dividend yields and offer stable income potential (especially when the market looks weak and is due for pullback). As a matter of fact, I posted an article this week recommending that investors add high-yielding utility stocks to their portfolio (Playing Defense with Dividends: 8 Utility Stocks Yielding Over 5%). Dividend stocks tend to be more stable as they are typically less volatile in nature compared to their non-dividend paying counterparts. However, downside price risk still exists if the equity market experiences a significant downturn (i.e., a falling tide lowers all boats). There is a chance that your entire dividend yield could be wiped out by a falling stock price (over the short-term). That said, investors that are primarily looking to generate income, but are weary of near-term downside price risk can use option income strategies... Read more