Apr 6, 2013 | Option Trading Basics, Options Calculations, Stock Option Strategies
When studying option trading basics we learn the equation for option premium value is: Premium = time value + intrinsic value If the strike price is at- or out-of-the-money the premium is all time value. Another basic principle is that time value decreases as we...
Mar 30, 2013 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
I sell predominantly 1-month options when selling covered calls. This decision was NOT based on anything I read or was told, but rather on experience and common sense. Most stocks with options have at least four expiration cycles affiliated with them at any point in...
Mar 23, 2013 | Fundamental Analysis, Investment Basics, Stock Investing
Successful covered call writing requires discipline and appropriate analysis specific for this great strategy. In the Blue Collar Investor (BCI) methodology we incorporate three major screening components before we even look at options chains: Fundamental analysis...
Mar 16, 2013 | Option Trading Basics, Options Calculations, Stock Option Strategies
Several of our Premium Members have requested we provide sample portfolios based on the CURRENT Premium Watch List as a guide to assist in mastering the strategy of covered call writing. In today’s article I will use the watch list dated 3-8-13 (stats taken on...
Mar 9, 2013 | Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
Covered call writing involves options calculations…there’s no getting around it! It’s been a while since we talked math. What’s with all the frowns? Mastering and understanding the calculations (The Ellman Calculator will do all the work) will enhance our...
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