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Tag Archives: strike price selection

Using Technical Indicators to Assist with Strike Selection

When selling covered call or put options, strike price selection is one of the three required skills. Here are the main factors we evaluate when determining which strike price to select: Overall market assessment Personal risk tolerance Return goals Technical price chart In this article, we will focus in on the technical parameters that will […]

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strike selection when selling cash-secured puts

Using Out-Of-The-Money Puts and In-The-Money Calls to Manage Bear Markets

Strike price selection should be a focus when selling call and put options. With the stock market bearish and volatile at the start of 2016, this article will highlight how such choices will offer significant protection while still allowing for compelling returns. The stock I selected to demonstrate the main points is Adobe Systems, Inc., […]

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put-selling calculations and strike price selection

“Moneyness” Of Call And Put Options: Understanding Strike Prices

Strike price selection is such a key part of options trading basics and options calculations. There are 3 types of strike prices for both put and call options: in-the-money, at-the-money (and the closely related near-the-money) and out-of-the-money. Moneyness tells option holders whether exercising will lead to a profit.  Moneyness looks at the value of an option […]

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Covered call writing and strike price selection

Achieving The Highest Covered Call Writing Returns Using The Blackjack Analogy

Covered call writers and all investors using stock options strategies have one thing in common: we all want to achieve the highest possible returns within the framework of our own personal risk tolerance. The focus of this site and The Blue Collar Investor is to provide the education and to share ideas that will help […]

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Calculating covered call writing returns

Selecting A Specific Strike Price For Our Covered Call Positions

We must master strike price selection to maximize our covered call writing returns. In our BCI methodology, strike price selection is ultimately determined after our careful stock screening analysis and overall market assessment. By developing a watchlist of eligible candidates with elite fundamentals and strong price chart technicals along with passing our common sense screens […]

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Selling deep out-of-the-money covered call options

Selling Deep Out Of The Money Covered Call Options

Strike price selection is a critical concept needed to master covered call writing. Selling in-the-money strikes is the most conservative approach to this strategy and selling out-of-the-money strikes is the most bullish. We use the latter when the overall market is bullish and chart technicals are bullish and confirming. Once we have decided that a […]

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Delta rises as strikes go deeper in-the-money

Delta and Our Covered Call Writing Decisions

When studying option trading basics and the Greeks we learn about our exposure to risk. Those of us who study options are constantly reading and hearing that delta, one of the Greeks, is one of the most powerful influences over option value. Because of this, I thought it prudent we discuss this subject in greater detail. Definition: Delta […]

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