Successful covered call writing requires proper stock and option selection. With the significant increase in our premium membership subscriptions over the past several months we have received dozens of inquiries as to how best to incorporate the stocks on the ‘running list”, our watch list, into our portfolios. The Premium (BCI) Report takes the universe [...]
Beta: Another Tool to Enhance our Covered Call Returns
When we defined the Greeks in a previous article concerning investment basics, it included a discussion of the price sensitivity of the option premium as it relates to the underlying equity, time and other factors. One of the rules was that (all other factors being equal) an increase in share volatility will increase an option premium. An equity [...]
Covered Call Writing and The Yield Curve
Part of learning investment basics is to understand the relationship between interest rates and our investment decisions. That’s why it is important to educate ourselves about Yield Curves. These are lines that plot the interest rates of (most frequently) three-month, two-year, five-year and thirty-year U.S. Treasury debt (bonds and T-bills). The curve is also used to predict changes in [...]
Setting Up a Covered Call Portfolio-Diversification and Cash Allocation
A key mission statement in our Blue Collar investment strategy for covered call writing is risk management. An integral component needed to accomplish this goal is diversification and cash allocation. We want to own at least five different stocks in five different industry segments with no single equity or industry representing more than 20% of our portfolio. [...]
Pump and Dump Scams
I’ll bet that each and every one of you has received an email that went something like this: IMAGINE IF YOU HAD THE CHANCE TO BUY A WAL-MART FRANCHISE IN MEXICO RIGHT WHEN IT FIRST OPENED ITS DOORS, AND ALL YOU NEEDED WAS A SMALL STAKE TO GET IN. HURRY, WE SEE THIS STOCK STARTING [...]
What is “Left Tail Risk” and How is it Impacting our Stock Portfolios?
What’s going on here? Stock prices are historically inexpensive. Bond yields need a magnifying glass to detect. Earnings reports have been positively surprising for eleven consecutive quarters. There are trillions of institutional and retail investor dollars sitting on the sidelines waiting to propel the market directly to the moon. So why is the market trending [...]
Investor Psychology and the Need for Structured Plans
We just can’t sell our losers! Some will actually buy more shares to average down the cost basis. Why is that? If sticking your index finger into an outlet resulted in an uncomfortable shock would you then try it with your other fingers? After you dipped your hand in water? Market psychology can turn an [...]
Dollar-Cost Averaging- An Investment Technique for You?
One of the most common questions asked of me is: “How do I get started if I don’t have a lot of money to invest?” Another is “What is the most conservative way to start selling covered calls?” These questions evoke the same sentiments I had when I first began educating myself in this strategy: [...]
Penny Stocks: I’ll Have the Salad
You’re out for dinner in your favorite restaurant. The waiter hands you a menu and you immediately focus in on the salad column looking for a healthy meal. Hmmm….broiled salmon on the house salad….looks good. As you continue to study your choices you notice the young couple sitting at the table to your right. Piled [...]
Margin Accounts and Covered Call Writing
In real estate investing, the concept of leveraged investing is well known and documented in such best-sellers as Robert G. Allen’s Nothing Down for the 2000s and Michael A. Lechter’s OPM (Other People’s Money). The idea of generating profit while using little or none of your own money down is enticing and exciting. It actually [...]
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Playing the Bid-Ask Spread When Selling Covered Call Options
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Analyzing a Covered Call Trade by Barry Bergman, Director of Research, The Blue Collar Investor Corp.
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Covered Call Writing Premiums: Intrinsic Value + Time Value
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Entering Our Covered Call Positions Mid-Contract
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Covered Call Writing and the Blue Collar Premium Report
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Covered Call Writing and The CBOE’s Volatility Index (VIX)
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Mid-Contract Unwind Exit Strategy: A Real Life Example
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Covered Call Writing: Stock Options with Additional Expiration Months
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Covered Call Writing and Stock Option Expiration Cycles
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Using Multiple Exit Strategies in the Same Contract Month
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Barry B: Premium Members, The Weekly Report for 05-25-12...
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Adrian: Alan, I first wanted to say that I hope you agreed...
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Alan Ellman: Dan, Glad to assist. The stats above relate to ...
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Dan: Thanks Alan for the prompt answer. However- I\'m n...
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