The Poor Man’s Covered Call (PMCC), also known as a long call diagonal debit spread, is where deep in-the-money (ITM) LEAPS options are used in place of the long stock […]
Analyzing LEAPS for The Poor Man’s Covered Call + Free Webinar Registration Link
Posted on November 28, 2020 by Alan Ellman in Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
Delta as the Sole Criteria for Covered Call Writing Strike Selection
Posted on October 19, 2019 by Alan Ellman in Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
Strike selection is the second required skill when writing covered call options or selling cash-secured puts. Over the years I have been asked to suggest a specific Delta for strike […]
Strike Selection for Portfolio Overwriting Low Cost-Basis Stocks
Posted on September 29, 2018 by Alan Ellman in Investment Basics, Option Trading Basics, Options Calculations, Stock Investing, Stock Option Strategies
Portfolio Overwriting is covered call writing using existing long-term buy-and-hold securities. It implies low cost-basis shares, dividend-bearing stocks and exchange-traded funds (ETFs). Since we don’t want our shares called away […]
Understanding the Impact Implied Volatility has on Delta
Posted on July 28, 2018 by Alan Ellman in Investment Basics, Option Trading Basics, Stock Investing, Stock Option Strategies
For covered call writers and put-sellers, the option Greeks play a major role in our understanding of the risks and value of our option premiums. We know our option premiums […]
Is There Less Risk Using Deep In-The-Money Long Calls versus Covered Call Writing?
Posted on July 21, 2018 by Alan Ellman in Exit Strategies, Investment Basics, Option Trading Basics, Stock Option Strategies
“There is less risk using deep in-the-money (ITM) long calls than buying stock and selling the corresponding short calls”. That is the case John made to me when I received […]
Hitting a Double with News-Related Market Overreactions
Posted on March 17, 2018 by Alan Ellman in Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Stock selection, option selection and position management are the 3 required skills for covered call writing and put-selling. One of our go-to exit strategies is “hitting a double” where we […]
Seeking the Highest Option Premiums is a Losing Strategy
Posted on February 10, 2018 by Alan Ellman in Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
One of the common mistakes made by covered call writers and put-sellers is to make investment decisions based primarily on the highest premium returns. Certainly, we all want to generate […]
The Collar Strategy from a Delta Perspective
Posted on January 6, 2018 by Alan Ellman in Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Put-selling, Stock Option Strategies
When covered call writing is combined with protective puts the strategy is known as the collar strategy. The short call places a ceiling on gains and the long put represents […]
Why Option Buyers Pay More for In-The-Money Strikes
Posted on August 19, 2017 by Alan Ellman in Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
When we sell an in-the-money covered call, we are taking a defensive posture and using the intrinsic value component of the premium to protect the time value initial profit. As […]
Determining the Delta of our Strikes Using the Airport Formula
Posted on August 12, 2017 by Alan Ellman in Investment Basics, Option Trading Basics, Stock Option Strategies
“What is the best Delta to use when selling covered call options?” I get this question frequently from the educated core of members from our BCI community. Delta is one of the five […]
Podcast
- BCI PODCAST 121: What is a SPAC (Special Purpose Acquisition Company)?
- 120. Using the Nasdaq-100 Volatility Index (VOLQ) in Covered Call Writing Decisions
- 119. Establishing Our Cost-Basis for Long-Term Holdings
- 118. Adjusting Our Portfolio Mix to Achieve Diversification and Cash Allocation
- 117. When a Covered Call Strike Moves $1000.00 In-The-Money
- 116. How to Execute a Covered Call Trade with a Buy/Write Combination Form
- 115. Establishing Our Cost Basis When Rolling-Out-And-Up On 2 Different Days
- 114. The Poor Man's Covered Call Selecting the Best LEAPS Strikes
- 113. How to Select the Best Strikes for Collar Trades
- 112. Using Covered call Options and Stock Dividends in Low Interest Rate Environments
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Beginners Corner Enhanced & Updated
- Lesson 1: Beginner's Corner for Covered Call Writing: 2nd Edition
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- Lesson 3: Beginner's Corner for Covered Call Writing- Stock Selection
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Beginners Corner Selling-Puts
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- Lesson 5:puts-selling-Calculating Returns
- Lesson 6:puts-selling-Executing Put-Selling
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