Actually a "reasonably" stable MS stock price works wonders for all those into "Covered Call" writing -- this essentially means that say you buy 100 MS shares at 25 USD you can write a "Call" at say 26 USD a share for which someone pays you 0.60 cents a share.
Sy you get IMMEDIATELY 60 USD on your 100 shares.
If the price goes up then you'll get "Called'" but you've STILL made 1 USD a share plus your 60 USD.
Getting "called" means the shares have reached your Offer price of 26 USD and you have to sell them at 26 USD a share. I can't emphasize enough however YOU STILL KEEP THE COVERED CALL PREMIUM which is what effectively can turn this into a "Perpetual Motion Money machine". Nothing trick dicky here -- it's a simple contract saying you've offered to sell your 100 share as 26 dollars a share for which someone will pay you 60 cents a share for the option to buy.
(It's like selling a piece of real estate -- You have a Condo say worth 300,000 USD -- you offer someone the right to buy it say within 6 months at 310,000 USD for which you will get paid say 15,000 USD.
You keep the 15,000 USD whether or not the person who you have sold the option to actually takes up your offer. The real estate value might have bombed so he won't want it.
At the expiry of the contract it's all square again BUT YOU KEEP the premium).
This sort of trading isn't too well known about -- it's basically dealing in "Derivatives" - since you are trading not in the actual stock itself but options on it.
These contracts last for 1 month and you KEEP the premium whether or not you "get called".
If you DON'T get called you write ANOTHER covered call for the following month --another 60 USD in your Bank account.
Even if you DO "get called" you still keep the 60 USD. Just buy another 100 shares again and write a new Call -- might be this time the premium is 70 cents a share.
(In reverse it's called Writing Puts).
I like MS the way it is. This way even with a STABLE share price you can get per 100 shares FOR DOING NOTHING around 700 - 800 USD a year -- money for "Old rope" -- most fund managers would slice their hands off to get a return of around 2.75% a MONTH.
I know this is a technical forum but we shouldn't divorce ourselves away from the Financial aspects of these organisations totally either.
Anyway for the "Non Geeks" here this is an EASY explanation of what I've been posting about here. covered calls writing