Contract adjustments to the terms of our covered call writing and put-selling options are due to corporate actions like mergers and acquisitions, special dividends and stock splits. This article will […]
Special Cash Dividends and Equity Distributions: Understanding Contract Adjustments
Posted on December 26, 2020 by Alan Ellman in Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Investing, Stock Option Strategies
Converting Non-Dividend Stocks Into Dividend Stocks
Posted on January 19, 2019 by Alan Ellman in Investment Basics, Option Trading Basics, Options Calculations, Stock Investing, Stock Option Strategies
Generating a consistent cash flow from stock dividends is an appealing benefit from owning shares for many investors. Stock ownership, in these scenarios, can create two income streams, one from […]
Dow 30 Stocks and Covered Call Writing: Implementing the Premium Blue Chip Report
Posted on October 27, 2018 by Alan Ellman in Investment Basics, Option Trading Basics, Stock Investing, Stock Option Strategies
The risk inherent in covered call writing and put-selling is related to price decline in the underlying security. Investors with low-risk tolerance may turn to blue chip stocks which have […]
Combining Dividend Capture with Covered Call Writing: Pros and Cons
Posted on June 16, 2018 by Alan Ellman in Fundamental Analysis, Investment Basics, Option Trading Basics, Stock Investing, Stock Option Strategies
Why not use covered call writing with only dividend-bearing stocks to generate three income streams; option premium, share appreciation to the (out-of-the-money) call strike plus the dividend itself? This article […]
Rolling Down with CALM: Turning Losses into Gains
Posted on November 21, 2015 by Alan Ellman in Covered Call Exit Strategies, Exit Strategies, Option Trading Basics, Options Calculations, Stock Option Strategies
Exit strategies for both covered call writing and selling cash-secured puts is one of the three required skills for maximizing investment returns. Whether we are mitigating losses, turning losses into […]
Ex-Dividend Dates: Rules for Standard and Special Dividends
Posted on July 18, 2015 by Alan Ellman in Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Dividends impact option premiums. When a dividend is distributed the cash holdings of a corporation is decreased and therefore the company and its stock are worth less. The eligibility to […]
Why do Call Buyers Exercise Early Prior to the Ex-Dividend Date?
Posted on May 16, 2015 by Alan Ellman in Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Covered call writers know that early exercise is extremely rare. Call buyers are generally better off selling the option rather than exercising early. In this article we will evaluate why […]
Rolling Down And Stock Splits: A Real Life Example
Posted on August 16, 2014 by Alan Ellman in Covered Call Exit Strategies, Exit Strategies, Option Trading Basics, Options Calculations, Stock Option Strategies
Covered call writing positions can be altered by exit strategies or contract adjustments. Contract adjustments are alterations that are typically made to option contracts when the underlying stock undergoes a […]
Early Exercise: I Don’t Want To Sell My AAPL Shares
Posted on March 15, 2014 by Alan Ellman in Covered Call Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Covered call writing obligates us to sell our shares to the option buyer at any time up to 4PM ET on expiration Friday should the buyer choose to exercise those options. […]
How Quarterly Dividends Impact Our Covered Call Option Premiums
Posted on April 6, 2013 by Alan Ellman in Option Trading Basics, Options Calculations, Stock Option Strategies
When studying option trading basics we learn the equation for option premium value is: Premium = time value + intrinsic value If the strike price is at- or out-of-the-money the […]
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
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Beginners Corner Selling-Puts
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