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Entries Tagged as 'strike price'

The Ellman Calculator- Single Tab: Selecting the Best Strike Price

July 3rd, 2010 · 32 Comments

 One of the common flaws found in many of the studies of the covered call strategy is that they select only slightly out-of-the-money strike prices. Needless to say, a majority of covered call writers are also guilty of the same mistake. It is certainly understandable why one would lean to this strike as we ultimately [...]

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Tags: Elite Calculator · S&P 500 · Schedule D · VIX · strike price

The Philosophy of Strike Selection

May 29th, 2010 · 46 Comments

You’re sitting at a blackjack table and looking at two eights, oh my, a sixteen!  The dealer shows a ten and you realize that you are in BIG trouble. He probably has a twenty so you take a card and pray.
Next hand…two eights again. The dealer now shows a five and probably has fifteen and will [...]

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Tags: At-the-money strike · Ellman Calculator · Out-of-the-money strike · delta · option chain · strike price

How to Read an Options Chain plus Exit Strategies-The Book

May 30th, 2009 · 14 Comments

The first time I looked at an options chain it reminded me of the first examination I took in Organic Chemistry…..I thought I was prepared for it but boy was I wrong! However, like most challenges (except perhaps organic chemistry), these hurdles can be overcome by simply doing your due-diligence and via repetition. For many experienced [...]

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Tags: Cashing in on Covered Calls · S&P 500 · bid-ask spread · bid-ask spread option chain market order limit order all or none orders AON · economic news · option chain · strike price

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