What Is The Magic Moo Cow Strategy?
A. The Magic Moo Cow / Buy Write strategy is an easy to learn highly effective strategy for increasing yield and decreasing the risk of owning a blue chip share portfolio. Magic Moo cows are shares and their milk is the premium that can be generated by writing covered calls against them. A Covered Call is selling the right to purchase your shares at a higher price than they are today on or before a date in the future (usually 1 month). In return for this you receive payment called a premium. Deliberately buying shares with the sole intention to write calls against them is called a “Buy Write”. Shares are bought and sold through brokers who help you to buy the shares and sell options. There are many optional shares in the Australian market ranging from as little as $3 to over $50. If the share goes up above the agreed price you sell it at a profit. There are strategies you can use to keep the shares if need be and these will all be explained in the seminar. The risks are similar to but
