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Writing Covered Call Options to Compensate for Share Depreciation

Covered call writing generates monthly (or weekly) cash flow but it also reduces our cost basis. The latter result is the reason why covered call writing increases our chances of a successful trade more so than simply owning the stock. Historical data tells us that in the long haul the stock market increases in value. […]

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Covered call writing and technical analysis

Special 1-Time Cash Dividends for Stocks with Improving Technicals

Covered call writing and put-selling candidates must pass a series of fundamental, technical and common-sense screens in order to be considered eligible for our portfolios. In early January 2017, one of our members, Jim W, asked about using Ford Motor Corp. (F), a stock that does not pass our BCI screens but has several positive […]

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Using Technical Indicators to Assist with Strike Selection

When selling covered call or put options, strike price selection is one of the three required skills. Here are the main factors we evaluate when determining which strike price to select: Overall market assessment Personal risk tolerance Return goals Technical price chart In this article, we will focus in on the technical parameters that will […]

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best stocks for covered call writing

When Do We Keep a Stock that has Declined in Value?

The BCI methodology requires fundamental analysis, technical analysis and common sense screening (like minimum trading volume and avoiding earnings reports). One of the most difficult decisions retail investors face is when to sell a stock that has depreciated in value. We all deal with such decisions every contract month no matter how rigorous a screening process we […]

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technical analysis for covered call writing

Technical Analysis Indicators for Long and Short-Term Portfolios

Technical analysis represents one third of the stock screening process in the BCI methodology. The other two are common sense principles (referred to as “descriptive terms for long-term investing) and fundamental analysis. Reading price charts is as much an art as it is a science and there is no one right way to technically analyze […]

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volatility and covered call writing

Comparing Implied Volatility and Historical Volatility During Earnings Season

When selecting stocks and options for covered call writing and put-selling we factor in volatility, both implied and historical. Historical Volatility (HV) is the actual volatility of a security over a given time period. HV is calculated by determining the average deviation from the average price based on one standard deviation (expected to be accurate 67% of the time).  Implied volatility (IV) is […]

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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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using beta when selling cash-secured puts and covered call writing

Using Beta To Capture Higher Premium Returns

When using covered call writing and put-selling strategies it is important to set goals for initial returns in order to select the most appropriate underlying security and option. My goal for initial returns is 2% – 4% per month and a bit higher in a bull market environment. Recently, several of our members have contacted […]

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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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Technical analysis and covered call writing

Technical Analysis and Covered Call Decisions: Looking Back At KORS

Technical analysis is an integral part of our covered call writing decisions for both stock and option selections. It also impacts our exit strategy decisions. KORS has been a favorite of Blue Collar Investors for quite some time as a frequent member of our Premium Stock List. For the week of September 16th through the […]

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