When we sell cash-secured puts, we have selected a stock or ETF based on sound fundamental, technical and common-sense principles. We generally select out-of-the-money put strikes that meet our stated initial time-value return goal range. Once the trade is executed, we move to position management mode. This article will highlight the choices we have available […]
Monitoring Our Collar Trades with the BCI Collar Calculator
The collar trade is a covered call writing trade with a protective put. The active leg of the trade is the short call. When exit strategy opportunities present, we make the appropriate trade adjustments. These can be incorporated into our BCI Collar Calculator. This article will highlight a hypothetical trade where the short call is […]
BCI PODCAST 70: COMPARING CALL AND PUT SELLING STRATEGIES
Watch Video: Listen To Audio Version: Covered call writing and selling cash-secured puts are both outstanding low-risk approaches to generating cash flow. These strategies are similar but not precisely the same. This podcast will feature the pros and cons of each strategy as well as calculations using the BCI covered call (Ellman) calculator and the […]
Ask Alan #188: Managing a Deep In The Money Covered Call Trade
Alan answers a question posed by Jim, who asks: Alan, Can one wait too long when ITM options go too deep ITM? On 1/5/21, I bought RIOT for $17.14 and sold the 2/19 $14.00 call for $5.65. On 2/15 the stock was at $48.06. Should I have rolled-up sooner as the stock was gaining value? […]
Rolling-Down to an ITM Strike in the Last Week of a Monthly Contract
When we roll-down our covered call trades, we generally do so to an out-of-the-money (OTM) strike to allow for share price recovery. However, in the final week of a monthly contract, if we hold a security, we will not use in the following contract month, it frequently makes sense to roll-down to an ITM strike. […]
After-Hours and Pre-Monday Morning Market Trading Bid-Ask Spreads
Many members of our BCI community have commented on the wide and, therefore, unfavorable bid-ask spreads that are published before the markets open and after they close. This article will explain this deviation and address how to manage these scenarios. What is after-hours trading? This is the exchange of securities outside the exchange’s normal […]
BCI PODCAST 69 Technical Analysis with The Wendy’s Company NASDAQ WEN
Watch Video: Listen To Audio Version: A technical chart gives us insight into a stock’s trend and momentum. Certain events can also the technical picture in dramatic ways. In this podcast WEN had a bullish price chart for several months into late2018 to mid- 2019. There was a dramatic turnaround in July 2019 as a […]
Should Good News Discourage Us From Entering a Covered Call Trade?
We examine the BCI Premium Stock Report on the Sunday May 23, 2021, after expiration Friday, for our Monday trade selections. One of the securities we choose is Applied Materials, Inc. (Nasdaq: AMAT). On Monday morning, May 24th, AMAT gaps up well above the price movement of the S&P 500. Is AMAT now too expensive? […]
Explaining “Bought-Up” Value When Rolling a Covered Call Out-And-Up
One of our key covered call writing exit strategies is rolling an option when the strike is in-the-money at expiration and we want to retain our shares. We can roll-out to the same strike at a later date or out-and-up to a higher strike at a later date. For both. there will be an intrinsic-value […]
BCI PODCAST 68 Volatility A Friend or Enemy to Covered call Writers and Put Sellers?
Watch Video: Listen To Audio Version: High implied volatility means higher premiums but also greater risk. This podcast analyzes lessons learned after the crash of 2008 as well as the corona virus crisis of 2020. Implied volatility stats and comparison charts are utilized to provide clarity to this important issue. BECOME A BCI MEMBER TODAY: […]
Podcast
- 70. COMPARING CALL AND PUT SELLING STRATEGIES
- 69. Technical Analysis with The Wendy's Company NASDAQ WEN
- 68. Volatility A Friend or Enemy to Covered call Writers and Put Sellers?
- 67. Should We a Short Put to Help Fund a Collar Trade?
- 66. Comparing the Cost-To-Close Covered Call Trades with Time-Value Return Goals
- 65: The 20%/10% Guidelines for Covered call Writing and Selling Cash-Secured Puts
- 64. Creating Dividend Like Income for Non Dividend Stocks
- 63. Rolling Decisions on Expiration Friday
- 62. Should I Unwind My Covered Call Trade 1 Week Prior to Contract Expiration?
- 61. Realized Versus Unrealized Capital Gains (Losses) for Covered Call Writing
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