Covered Call Writing is a venerable strategy. It is usually added to an existing portfolio of stocks. One trades-off upwards potential in strong rallies against a constant stream of additional income from options writing. This work investigates various aspects of this strategy for Apple, Ebay...

We model the relationship between asset float (tradeable shares) and speculative bubbles. Investors trade a stock with limited float because of insider lock-ups. They have heterogeneous beliefs due to overconfidence and face short-sales constraints. A bubble arises as price overweighs optimists'...