Posted on May 15, 2013
by Alan Ellman
in Ask Alan
Alan answers a question posed collective my many of the BCI member family, who ask about calculating final returns after the trade has been completed. This is part 1 of a 3 part series. If you want more “Ask Alan” videos, you can view the archive. More Video: For those new to Alan’s system of [...]
Posted on May 11, 2013
by Alan Ellman
in Technical Analysis
Over the past few years, the popularity of traditional options has grown exponentially, as investors have been more willing to experiment with a broader set of investment genres. The market has responded to this more expansive behavior by creating a myriad of new products such as “weeklys” and “minis”, topics Alan has addressed on this [...]
Posted on May 8, 2013
by Alan Ellman
in Ask Alan
Alan answers a question by Shamin from Belgium. who asks: “If I sell a covered call and the stock price goes down, and then I decide to buy a call… — do they cancel each other out? (or) — can the person who bought my option originally still ask for my shares?” If you want [...]
Posted on May 4, 2013
by Alan Ellman
in Option Trading Basics, Options Calculations, Stock Investing, Stock Option Strategies
Innovative covered call writers can develop ideas of implementing a strategy in unconventional ways. For example, we can invest in a money market or CD and perhaps not even beat the inflation rate with those dividends. We can buy a quality bond and wait six months to receive our first (ho-hum) return. Covered call writers can [...]
Posted on May 1, 2013
by Alan Ellman
in Ask Alan
Alan answers a question by William of Manteca, CA. who asks: “With these Details in mind… * RAX was trading at $59 * $50 call option was selling at $5.70. * Initial return for selling $55 in-the-money call option was 3.1%. – $1.70 of time value – $4 in-the-money ($4 of intrinsic value) … how [...]
Posted on April 27, 2013
by Alan Ellman
in Option Trading Basics, Options Calculations, Stock Option Strategies
Covered call writing entails buying a stock and then selling an option. But what if I buy a call option instead of the stock and then sell a call option on that option? I’ll be spending less money than the outright purchase of the equity and still generate cash from the sale of the call [...]
Posted on April 24, 2013
by Alan Ellman
in Ask Alan
Alan answers a question posed by Al from Melbourne, Florida. who asks: “One of my first option choices was to sell 5 positions on HTZ with a strike price of $20. When I opened the position, HTZ was trading at $21.06 per share, and I received the premium of $1.40 per share when I sold [...]
Posted on April 17, 2013
by Alan Ellman
in Ask Alan
Alan answers a question posed by Kevin of Charlotte, NC. who asks: “I think you do a great job and provide a great service to many who would otherwise be ignored by the Wall Street elite. My question revolves around bearish markets and retracements. You have advocated selling in-the-money calls where essentially you’re only picking [...]