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Learn how to invest by selling stock options.

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managing covered call trades

Managing Winning Trades for High Implied Volatility Stocks

Covered call writing and cash-secured put-selling are conservative strategies geared to retail investors who have capital preservative as a key strategy requirement. When we use high implied volatility underlying securities the strategy will have a broader range of risk-reward exposure. This article was inspired by Randy P. who had outstanding results using Applied Optoelectronics Inc. […]

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Ask Alan

Ask Alan #142 – “Evaluating the Cost-To-Close Prior to Contract Expiration”

Alan answers a question posed by Andrew, who asks: I purchased UCTT for $27.90 and wrote an October 1-month $30 call for $0.77. The stock is now trading at $31.62 and the “ask” for the call is $2.50. Should I unwind or is it too costly? Thanks, Andrew ——— It’s the 2nd Wednesday of the […]

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The Collar Strategy from a Delta Perspective

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 a floor protecting losses. The two option positions should result in a net credit. Typically, out-of-the-money calls and puts are selected. Covered call writing and […]

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