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 [...]
Entries Tagged as 'implied volatility'
Portfolio Overwriting- Selling Covered Calls on Stocks you Want to Keep
February 20th, 2010 · 46 Comments
Tags: Portfolio Overwriting · economic news · implied volatility · support and resistance
Delta and Covered Call Writing
February 6th, 2010 · 39 Comments
Several months ago I wrote an article concerning the Greeks, which measure an option’s exposure to risk. Those of us who study options are constantly reading and hearing that delta, one of the greeks, is one of the most powerful influences over option value. Because of this and your interest in the subject, as expressed in [...]
Tags: delta · greeks · implied volatility
Implied Volatility and our Option Premiums
November 29th, 2009 · 42 Comments
What makes some options premiums worth so much more than others? Let’s say we have two stocks, A and B. Both are trading @ $25/share. We look to sell the same month A-T-M $25 strike and one (stock A) returns 2% and the other (stock B) 4%. WHY? The answer lies predominently in the mysterious world of implied [...]
Tags: Cashing in on Covered Calls · S&P 500 · VIX · economic news · historical volatility · implied volatility · intrinsic value · standard deviation · time value
