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Ask Alan #167 What is “Seeking Alpha?”

Alan answers a question posed by Mary, who asks:

Alan,
Alan, I follow the site Seeking Alpha as well as your BCI site. Can you give your thoughts on how the BCI methodology seeks to beat the market? I’m really enjoying your material. Thanks, Mary

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It’s the 2nd Wednesday of the month. Time for another original episode of Ask Alan. AA#167, “What is “Seeking Alpha?”

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Posted on February 12, 2020 by in Ask Alan

About Alan Ellman

Alan Ellman loves options trading so much he has written four top selling books on the topic of selling covered calls, one about put-selling and a sixth book about long-term investing. Alan is a national speaker for The Money Show, The Stock Traders Expo and the American Association of Individual Investors. He also writes financial columns for both US and International publications along with his own award-winning blog.. He is a retired dentist, a personal fitness trainer, successful real estate investor, but he is known mostly for his practical and successful stock option strategies.
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4 Responses to “Ask Alan #167 What is “Seeking Alpha?””

  1. Ted February 13, 2020 2:03 am
    #

    Hi Alan,

    I hope the FL trip went well. I am not understanding the mid-contract unwind. You’ve stated in the e-book (pg. 35 “Calls”) that deep ITM contracts can be bought back cheaply at .10 if the stock price rises quickly. The time value is only .10, but the cost to buy back the contract is much higher. This doesn’t make any sense. You’re not really making any money on the trade. I feel it’s better to just let the contract expire and collect the premium.

    Also, I entered a trade for AMED based on the report stating earnings would be on 2/26/20. My contract expires on 2/21/20 with a strike of 175. AMED confirmed earnings for 2/18/20. I realize the report at the time gave a tentative date. I guess I will have to wait it out. The good news is that I buy deep ITM contracts.

    I’m learning as I go.

    Thank you for your program.

    – Ted

    • Alan Ellman February 13, 2020 8:11 am
      #

      Ted,

      When a strike moves deep in-the-money the cost-to-close (CTC) does go up. However, the intrinsic-value of that CTC is neutralized by the increase in the value of our chares. That leaves the time-value ctc which will approach zero. Check the mid-contract unwind exit strategy explanation with real-life examples in my books and DVDs.

      Projected earnings dates can change until confirmed by the company. When this occurs we must decide if we want to hold the stock through the report but we should not have an option obligation in place. With AMED trading at $198.81 pre-market this morning, there is huge downside protection of your $175.00 position. The stock has been soaring of late. By leaving the short call in place, you will PROBABLY have protection to the downside but will not be able to take advantage of share appreciation from a favorable earnings surprise.

      Alan

  2. Walter Debus April 29, 2020 12:10 am
    #

    Allen

    I am a member, how do I get access to the PMCC calculator?

    Thanks, Walter