beginners corner
Tag Archives: Exchange-traded funds
covered call writing strategies

ETF Index Tracker Proposed Strategy: A Risk-Free Investment?

Using covered call writing and exchange-traded funds (ETFs) is a viable approach to generating monthly cash flow. I personally use this strategy in my mother’s portfolio. Can this investment style be expanded to include inverse ETFs to move this expanded path to a near risk-free system? In April 2017, Rushbabh, a member from Australia, was kind enough […]

43 Comments Continue Reading →
covered call writing and earnings reports

Locating Stocks During the Heart of Earnings Season

Never write a covered call or sell a cash-secured put when there is an upcoming earnings report prior to contract expiration. This is one of the most important rules in the BCI methodology. Adhering to this guideline can create challenges during the heart of earnings season when most companies publicize their financial statements. In our BCI […]

22 Comments Continue Reading →
Put-selling on ETFs

Using Puts and SelectSector SPDRs to Create an Ultra-Conservative Option-Selling Strategy

Selling out-of-the-money puts and using top-performing SelectSector SPDRs can be combined to design an extremely defensive option-selling strategy in a volatile market environment like we are currently experiencing. Using Inverse Exchange-traded Funds is another approach. In this article, we will discuss the former strategy,.  When we sell an out-of-the-money cash-secured put we are agreeing to […]

26 Comments Continue Reading →
option-selling decisions based on implied volatility

Implied Volatility of ETFs and our Covered Call Writing and Put-Selling Decisions

Covered call writers or cash-secured put sellers who use ETFs (as opposed to individual stocks) tend to be novice put writers, more conservative investors, or have limited funds or time. If you fall into any of these categories, knowing your risk level is critical to your investment decisions and specifically, to which underlying securities you […]

16 Comments Continue Reading →

Exchange-Traded Funds: Funding Option-Selling Portfolios With ETFs

For the strategies of covered call writing and selling cash-secured puts, we are selling the right, but not the obligation, to buy or sell 100 shares of the underlying security. That security can be a stock or and exchange-traded fund (ETF). In this article, I will highlight ETFs and demonstrate a few approaches to funding […]

30 Comments Continue Reading →
covered call writing exchange-traded funds

Why Covered Call ETFs Under-Perform

With the popularity of covered call writing and selling cash-secured puts growing in popularity, we have witnessed the creation of new exchange-traded funds based on these strategies. Over the last few years I have not been a proponent of these securities mainly because they under-perform the overall market and motivated retail investors can do so […]

14 Comments Continue Reading →
Blue Collar Investor ETF Report

ETF Option Trading vs. Index Option Trading

Most options traders including covered call writers are familiar with exchange-traded funds (ETFs) and many trade options on these securities. Many have also heard of, but are not as familiar with, index options. The purpose of this article is to detail the differences between ETF option trading and index option trading. Definitions  Exchange-traded fund (ETF): […]

14 Comments Continue Reading →
covered call writing and the Ellman Calculator

Writing Covered Calls On Broad Market Exchange-Traded Funds

The initial main step for covered call writers is to select the best underlying security. This choice will vary from investor to investor based on goals and risk tolerance. Some of our members prefer exchange-traded funds (ETFs), a strategy I use in my mother’s portfolio. ETFs offer the advantages of instant diversification, less volatility (in […]

17 Comments Continue Reading →
Covered call writing and The Blue Cololar Investor Premium ETF Report

Implied Volatility And Our Premium Exchange-Traded Funds (ETF) Report

Our study of option trading basics and stock option strategies involves an analysis of implied volatility. This is the market’s forecast of the underlying security’s volatility as implied by the option’s price in the market place. Frequently, the mid-point of the bid-ask spread, called the mark, is used. In this article, I am highlighting a […]

6 Comments Continue Reading →