Comments on: Covered Call Writing: Generating Additional Income When A Stock Price Gaps Up https://www.thebluecollarinvestor.com/covered-call-writing-generating-additional-income-when-a-stock-price-gaps-up/ Learn how to invest by selling stock options. Mon, 15 Apr 2013 11:45:34 +0000 hourly 1 By: Alan Ellman https://www.thebluecollarinvestor.com/covered-call-writing-generating-additional-income-when-a-stock-price-gaps-up/#comment-11932 Mon, 15 Apr 2013 11:45:34 +0000 http://www.thebluecollarinvestor.com/?p=7990#comment-11932 In reply to Larry Browder.

Larry,

On the issue of closing your position when the premium is all intrinsic value you are spot on. You’ve maxed your trade (congrats!) and now can use that cash to generate a second income stream.

Glad you can make the Atlanta seminar.

Opting for Arline’s birthday celebration over dinner with me and Linda is an ideal exit strategy. There would be way too much risk for conservative investors like us had you taken a different approach.

I’ll contact you directly once I know my full schedule.

Alan

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By: Alan Ellman https://www.thebluecollarinvestor.com/covered-call-writing-generating-additional-income-when-a-stock-price-gaps-up/#comment-11931 Mon, 15 Apr 2013 11:38:57 +0000 http://www.thebluecollarinvestor.com/?p=7990#comment-11931 In reply to Vincent.

Vincent,

As a GUIDELINE, I prefer an ITM strike since there is limited time until expiration for additional exit strategy execution. If we can generate an ADDITIONAL 1-2% of time value with protection we have an ideal situation. An exception would be in a strong bull market I would opt for an OTM strike.

Alan

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By: Larry Browder https://www.thebluecollarinvestor.com/covered-call-writing-generating-additional-income-when-a-stock-price-gaps-up/#comment-11845 Sun, 14 Apr 2013 15:39:13 +0000 http://www.thebluecollarinvestor.com/?p=7990#comment-11845 Alan: I enjoyed reading about the stock that gaps up, as I am in the same situation with CELG. I think I will follow your recommendation and buy the calls back and sell the stock. Otherwise, i am just playing the time decay game and will never enjoy the big appreciation. I had taken a little different tact and rolled the options up and out until July. The time value has now almost disappeared due to the stock’s continued rise. Does my thinking here sound reasonable? By buying the calls at almost intrinsic value and then selling the stock, I can put those dollars to work to gain much between now and July. Once again-am I making sense? On another subject, I have signed up to attend the Atl. Options Club meeting next Saturday to hear you speak-I’m looking forward to it! I had pondered the possibility of buying you and your wife [Linda?] dinner either Friday or Saturday night [if you were amenable], but my wife Arline told me we were obligated on Friday night and that I had promised to take her out Saturday night, as April 20 is her birthday. I guess in this case, “it’s the thought that counts”. As a consolation “prize”, I would be happy to buy you lunch after you speak on Saturday if you do not have other plans. You can let me know or we can work it out on Saturday. See you Saturday. Larry

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By: Vincent https://www.thebluecollarinvestor.com/covered-call-writing-generating-additional-income-when-a-stock-price-gaps-up/#comment-11838 Sun, 14 Apr 2013 13:29:12 +0000 http://www.thebluecollarinvestor.com/?p=7990#comment-11838 Alan,

When using this strategy which type of strike price do you favor if any?

Thank you.

Vincent

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By: Barry B https://www.thebluecollarinvestor.com/covered-call-writing-generating-additional-income-when-a-stock-price-gaps-up/#comment-11731 Sat, 13 Apr 2013 22:54:47 +0000 http://www.thebluecollarinvestor.com/?p=7990#comment-11731 Premium Members,

This week’s Weekly Stock Screen And Watch List has been uploaded to The Blue Collar Investor premium member site and is available for download in the “Reports” section. Look for the report dated 04-12-13.

Also, be sure to check out the latest BCI Training Videos and “Ask Alan” segments. You can view them at The Blue Collar YouTube Channel. For your convenience, the link to the BCI YouTube Channel is:

http://www.youtube.com/user/BlueCollarInvestor

Since Earnings Season is about to begin, be sure to read Alan’s article, “Constructing Your Covered Call Portfolio During Earnings Season”. You can access it at:

http://www.thebluecollarinvestor.com/constructing-your-covered-call-portfolio-during-earnings-season/

Best,

Barry and The BCI Team

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By: Barry B https://www.thebluecollarinvestor.com/covered-call-writing-generating-additional-income-when-a-stock-price-gaps-up/#comment-11597 Sat, 13 Apr 2013 16:02:46 +0000 http://www.thebluecollarinvestor.com/?p=7990#comment-11597 Premium Members,

Power is back! It was out for about two hours…back to the report.

best,

Barry

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By: Alan Ellman https://www.thebluecollarinvestor.com/covered-call-writing-generating-additional-income-when-a-stock-price-gaps-up/#comment-11587 Sat, 13 Apr 2013 13:44:24 +0000 http://www.thebluecollarinvestor.com/?p=7990#comment-11587 Premium members;

Due to a power outage in South Jersey, some of our team members are unable to work on this week’s stock report. In the past, power has been restored in a reasonable time frame so this is most likely not an issue. I wanted to give you a heads-up in case there is an unusual delay. I’ll keep you updated.

Alan

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