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covered call writing and stock dividends

Covered Calls and Dividends: A Proposed Strategy

Covered call writers must factor in dividends into our investment strategies. More specifically, ex-dividend dates for these are the dates shareholders must own the shares to benefit from the dividend distribution. Call buyers must exercise the option prior to the ex-date to capture the forthcoming dividend. This makes our shares subject to early exercise (exercise […]

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covered call writing and dividend capture

Covered Call Writing And Dividend Capture: Evaluating A Proposed Strategy

Capturing dividends using covered call writing has been a topic on great interest lately. I recently wrote an extensive white paper on this topic located in the “resources/downloads” section of your premium site. In this article I will evaluate an interesting approach to a strategy recently sent to me by one of our members who […]

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Covered call writing option basics

Option Prices: The Role Of Interest Rates And Dividends

Mastering options trading basics includes understanding the factors that impact our option premiums. The original Black Scholes pricing model was designed to evaluate European Style options which can only be exercised on expiration Friday, not earlier. Here is a brief summary of the factors considered in these original pricing models:   These four main factors […]

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Covered call writing and special cash dividends

Special 1- Time Cash Dividends and Our Covered Call Positions

Every so often we will see a company declare a “special dividend” which is separate from the typical recurring dividend cycle, if there is one. It is frequently a reflection of exceptionally strong earnings and/or a company with a large cash balance. It is a positive sign regarding the financial health of this corporation. Some […]

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Covered Call Writing: Factors That Affect The Value Of Our Option Premiums

So you sold an options contract for $380 and generated a 3.5% 1-month return. Did you ever wonder how the market determined the value of that options contract to be $380? The simple equation that most of us know and understand is the following:  Option premium = Intrinsic Value + Time Value To review, let […]

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THE FACTORS THAT DETERMINE THE VALUE OF YOUR OPTION PREMIUM plus Our Readers Pick their Favorite Stocks

So you sold an options contract for $380 and generated a 3.5% 1-month return. Did you ever wonder how the market determined the value of that contract to be $380? The simple equation that most of us know and understand is the following:  Option premium = Intrinsic Value + Time Value To review, let me […]

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