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maximizing covered call returns using theta

Should I Enter My Trades On Expiration Friday Or The Following Monday?

The timing of our option trade executions will impact the success of our covered call writing returns. The BCI methodology prides itself on having rules and guidelines for buying back options, re-selling options and selling long stock positions. One question that many of us have thought about is when to enter our 1-month trades. My [...]

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options on an index and on an exchange-traded fund

Index Options And Exchange-Traded Funds Options: A Comparison

Writers of covered calls and cash-secured puts use stocks or exchange-traded funds as the underlying securities. It is the value of these securities that give value to our option premiums. For example, we will buy back an option when share price moves down causing the corresponding option to decline in value as well. We may [...]

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Avoiding early exercise wihen covered call writing

How To Avoid Early Exercise When Dividends Are About To Be Distributed

Covered call writing is a low-risk strategy that allows us to generate monthly cash flow by selling stock options. Since we are obligated to sell our shares to the option buyer (holder), one of the understood possibilities is that we will “lose” our shares at the strike price or the price we have agreed to [...]

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Covered call writing and the Ellman Calculator

Expanded Weekly Options: When Should We Enter A Trade?

With the rising popularity of stock option strategies and covered call writing in particular, we have seen the creation of more option products like weekly stock options. Weeklys expire each Friday of the month whereas the more traditional monthlys generally expire only on the 3rd Friday of each month. Weeklys fall into one of two categries: [...]

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covered calls versus covered puts

Covered Puts Versus Covered Calls

Covered call writing is the main focus of this site and the BCI methodology. Based on member demand and similarity of strategies we have been adding information on selling cash-secured puts, the topic of my upcoming 5th book. Recently I have received inquiries on related strategies that have led to some confusion specifically about covered [...]

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Blue Collar Investor ETF Report

ETF Option Trading vs. Index Option Trading

Most options traders including covered call writers are familiar with exchange-traded funds (ETFs) and many trade options on these securities. Many have also heard of, but are not as familiar with, index options. The purpose of this article is to detail the differences between ETF option trading and index option trading. Definitions  Exchange-traded fund (ETF): [...]

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covered call writing and the Ellman Calculator

Writing Covered Calls On Broad Market Exchange-Traded Funds

The initial main step for covered call writers is to select the best underlying security. This choice will vary from investor to investor based on goals and risk tolerance. Some of our members prefer exchange-traded funds (ETFs), a strategy I use in my mother’s portfolio. ETFs offer the advantages of instant diversification, less volatility (in [...]

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covered call writing with weekly options

Weekly Stock Options For Covered Call Writing: Pros And Cons

Weekly options (weeklys) are becoming an attractive choice for many covered call writers. These are options that expire every week rather than the more conventional monthly options. Weeklys are listed each week except that no new Weeklys are listed that would expire during the expiration week for regular options (the third Friday of each month), nor [...]

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covered call writing and option value

Am I Losing Money When Option Value Increases After Entering A Covered Call Position?

The risk in covered call writing is in the stock purchased not in the option sold. Sound familiar? It’s in all my books and DVD Programs and mentioned in my seminars and webinars. Yet it appears when we look at our brokerage statements that this concept is not true. That is because we see a [...]

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covered call writing and technical analysis

Combining Technical Analysis And Market Assessment To Determine Strike Selection

Mastering stock and strike price selection are key components in successful covered call writing. There is no one factor that will dictate our choices but rather a mosaic of bits of information which will lead us to the best selections. In this article, I will discuss two of those critical components: technical analysis of the [...]

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