intrinsic value

The Blue Collar Investor WeBlog Investment Strategies by Alan Ellman

Entries Tagged as 'intrinsic value'

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 [...]

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Tags: Cashing in on Covered Calls · S&P 500 · VIX · economic news · historical volatility · implied volatility · intrinsic value · standard deviation · time value

Selling the In-The -Money Strike- A New Way of Thinking

March 8th, 2009 · 19 Comments

A few weeks ago I wrote an article entitled, Selecting the Best Strike Price. Since then I have received several emails asking for more information as to why I sell I-T-M strikes and the rationale behind my thoughts. I fully understand your concern about this issue since historically Out-Of-The-Money strikes have been the most popular.
Before [...]

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Tags: Alan Ellman · Cashing in on Covered Calls · Economy · S&P 500 · The Blue Collar Investor · VIX · economic news · intrinsic value · strike price · time value

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