Feb 8, 2014 | Covered Call Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Part of our covered call writing education involves looking back on both successful and unsuccessful trades and learning from them. A few months ago I shared with a premium member a trade I had executed the previous month and saved it (I have a collection of dozens of...
Feb 1, 2014 | Investment Basics, Option Trading Basics, Stock Option Strategies
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...
Jan 25, 2014 | Covered Call Exit Strategies, Option Trading Basics, Options Calculations, Stock Option Strategies
Covered call writing has some drawbacks as do all investment strategies. Profit limitation by the strike price is one such disadvantage. How do we manage a situation where the price of the stock moves well above the strike sold? Some covered call writers will roll out...
Jan 18, 2014 | Investment Basics, Option Trading Basics, Stock Option Strategies
In our BCI methodology, our covered call writing strategy has several guidelines and one rule. The rule is to never sell a covered call option when there is an upcoming earnings report prior to expiration. Some may ask why not? With the added volatility are our...
Jan 11, 2014 | Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution
Stock options are contracts with terms that can change prior to expiration. Mergers, acquisitions, special dividends and stock splits are some of the events that may necessitate the change in terms. Since early September, New Orient Edu&Tech (EDU) has been on the...
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