"When Alexander saw the breadth of his domain, he wept, because there were no more worlds to conquer."

Photo Credit: www.insidermonkey.com

Whether it was said by Pathos or Hans Gruber, I like to wonder if Jamie Dimon of JPMorgan Chase (NYSE:JPM) has similar thoughts racing through his head as he sits in his corner office at 270 Park after the close sipping a cool martini. Having survived Congressional inquiries, a whale of a loss in London, the meltdown and subsequent settlement over their MBS business, Madoff, and others, Dimon was recently rewarded with a 74% pay raise, while maintaining the two loftiest positions at the country's largest commercial bank.

After this vote of confidence, he announced the slashing of 8,000 jobs, mostly in the mortgage area, though he said he would add a few jobs in compliance. It appears to some that ethics and controls had taken a vacation at the bank these last few years. Dimon says the layoffs are part of the normal process, something about "trimming the sails being a part of life."

Though earnings at the bank took a dip due to the aforementioned hurdles, and Dimon admitted more obstacles are imminent, the bank remains a mainstay in almost every value-based portfolio, with the current CFO saying the company is 20% undervalued at its current trading price.

So even with the impending problems creating numerous hits to future earnings, Dimon and his bank should emerge relatively unscathed with little severe risk to the downside. This confluence of factors makes the stock a perfect candidate for writing calls against the stock ("covered call writing") in your portfolio to produce extra income with minimal risk.

Writing covered calls is about as easy as Dimon handing out pink slips. As a primer: You own the stock. (I'm not advocating you rush out and buy the common if you don't already own JPMorgan just so you can play our little game). You sell one call for each 100 shares you own, and in doing so you are selling the rights for someone out there to buy a hundred shares of the stock (for each call they buy) at a specific price (the exercise or strike price) for a specific period of time (the exercise or expiration date).

You pocket the premium for selling the call immediately.

If the price does not exceed the exercise price by the expiration date, you keep the premium and your stock. If the price on expiration day is above the strike price, there's a good chance you will have to sell your shares at the strike price, but you still keep the premium you received. Any dividends paid before the expiration date are yours to keep. If the stock price falls and you are afraid of losing any gains you may have realized, you can always sell your stock, but you should buy back the option you sold, otherwise you are holding a naked position. (Not a position you want unless you're built like Charlize Theron or Brad Pitt vacationing at Leucate Plage.)

Regardless of what you think of him, Dimon will probably weather the next storm at JPMorgan, just as he has survived crisis after crisis which surely would have brought a mere mortal CEO to his knees. There are a number of technical factors besides that make the perfect stock for call writing: the volatility is moderate, the dividend is consistent, the liquidity of the options is immense. But we'll keep these in our back pocket for now as well. It's enough to know that the premiums received can increase your cash flow from holding the stock.

Though only sports stars are supposed to make the money Dimon is reeling in, and I'm certain President Obama saw the pay raise as another blow to his "where's the equality in this capitalism thing", Dimon can sit back and enjoy the view, while you have your own martini with a smile, counting the extra cash from your call writing.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.