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VIX options to hedge an portfolio

VIX Volatility Options: A Place In Our Covered Call Writing Portfolio?

Option returns play a major role in our covered call writing and put-selling strategies. Mega-returns can be quite enticing but also very dangerous. Recently, with market volatility rising exponentially in response to global-economic concerns, a few of our members have inquired about using volatility options ($VIX) based on the S&P 500 volatility as a means [...]

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Percentage Of Options Expiring Worthless: Debunking A Myth

“Selling covered call options and cash-secured puts is a smarter strategy than buying options because 90% of options expire worthless“. We’ve all heard this argument but never from me because it is simply not accurate. The reason so many venues present this statement as truth is because only 10% of option contracts are exercised. That is true. [...]

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short interest and covered call writing

Short Interest Explained

Covered call writers and put-sellers are always looking for metrics to improve trading results. Recently, we have had several inquiries about adding short-interest to the screening process. Over the years we have enhanced our Premium Member Stock and ETF Reports based on feedback we have received from you, our members. For example, we added ex-dividend [...]

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Selling Cash-Secured Puts On An Index

The index short put strategy is a form of selling cash-secured puts. It is a bullish strategy with the goal of generating premiums selling put options that expire worthless. Traditionally, at-the-money strikes are sold. As opposed to using stocks and exchange-traded funds as the underlying securities, index options are cash-settled at a profit if the strikes [...]

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calculating covered call writing returns

Rolling Out Decisions: Evaluating a Real Life Trade

Rolling options is an important exit strategy choice when selling covered call and put options. Options can be rolled up and down in the same contract month or a future contract month. For the most part, we roll down in the same contract month and roll out or out-and-up in the next contract month.  I [...]

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ex-dividend dates and option-selling

Ex-Dividend Dates: Rules for Standard and Special Dividends

Dividends impact option premiums. When a dividend is distributed the cash holdings of a corporation is decreased and therefore the company and its stock are worth less. The eligibility to receive the dividend depends on several factors including the size of the dividend. First, let’s define some terms: Types of dividends Standard dividends: A distribution [...]

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selling cash-secured puts in bear markets

How to Generate 10% Per Year in Bear Markets by Selling Stock Options

Covered call writing and put-selling generate monthly cash flow with the inherent risk of share depreciation. One of the major advantages of these conservative strategies is that they can be tailored to all market environments. In today’s article I will address one way to “stay in the game” even when market conditions are working against [...]

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stocks for covered call writing and selling puts

Premium Stock Reports: Final Selections for Our Option-Selling Portfolios

The Blue Collar Premium Stock reports list eligible candidates for both covered call writing and selling cash secured puts. These files historically contain between forty to sixty securities and our members have developed many innovative ways to make final decisions as to which securities will be included in the current month’s portfolio. In this article, I [...]

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covered call writing and short selling concerns

Short Selling and Covered Call Writing

Screening stocks and exchange-traded funds for covered call writing and put-selling involves evaluating for fundamentals, chart technicals and common sense parameters. One of the issues that can impact a position we hold from time to time is short selling.   Definition Short selling is when we sell a stock we don’t yet own. It is borrowed [...]

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Negotiating better option prices for covered call writing and selling cash-secured puts

How To Negotiate Better Option Prices Using The “Show Or Fill Rule” / $30 Rebate Expiring

Covered call writers generate cash flow by selling call options associated with a stock or exchange-traded fund. Our goals are to generate the highest possible returns with low-risk trades and that fit our requirement for capital preservation. The three required skills for achieving these goals are stock (or ETF) selection, option selection and position management [...]

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