Wait a minute! 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 outright purchase of the equity and still generate cash from the sale of the call option! This idea has come to many of you and as [...]
Entries Tagged as 'economic news'
Covered Calls and LEAPS- An Alternative Strategy
February 27th, 2010 · 56 Comments
Tags: Calendar Spread · Diagonal Spread · Horizontal Spread · LEAPS · economic news
Portfolio Overwriting- Selling Covered Calls on Stocks you Want to Keep
February 20th, 2010 · 46 Comments
Most covered call writers purchase a stock specifically for the purpose of selling the corresponding call option. The investment time frame is one to two months as earnings reports will end the “run” of even the best performing equities (if you agree with my guidelines). In many cases share assignment is permitted by the seller [...]
Tags: Portfolio Overwriting · economic news · implied volatility · support and resistance
Early Exercise and Assignment of Options
February 13th, 2010 · 30 Comments
When we sell a covered call option, we are undertaking an obligation for which we are well paid. Should the option holder decide to exercise that option, we must sell our shares at the specified strike price at or prior to the expiration date. This is the nature of American style options as opposed to [...]
Tags: Early exercise · american style options · assignment of options · economic news · european style options · ex-dividend date
The Show or Fill Rule- More Cash for Us! plus a Spreadsheet for I-T-M Strikes
January 10th, 2010 · 48 Comments
When David did battle with Goliath, he used the leverage of his slingshot to overcome overwhelming odds. In much the same way we, as Blue Collar Investors, must use every tool available to us to level the playing field with the market makers and specialists who are taking the other side of our trades. One [...]
Tags: Limit order display rule · Show or fill rule · economic news
Non-Standard Options- What they are and why we should avoid them
January 3rd, 2010 · 48 Comments
You do your due-diligence and select a great performing stock in a great performing industry. Once you have determined that this equity meets all of our system requirements, you head off to the option chains to check the calculations. Since the stock is trading @ $39 per share you check the $40 call. This can’t [...]
