Mar 2, 2019 | Exchange-Traded Funds, Investment Basics, Option Trading Basics, Put-selling, Stock Option Strategies
Traditional covered call writing involves first buying a stock (or exchange-traded fund) and then selling a corresponding call option. The result of the initial trade is to generate cash flow from the option sale and lower our cost basis on the stock side. Based on...
Feb 23, 2019 | Fundamental Analysis, Investment Basics, Stock Investing
Treasury bond yields are followed by stock investors and changes in yield can impact the success of our trades. In particular, the 10-year treasury yield is used as a yardstick for critical financial issues like mortgages. What is bond yield? This is the...
Feb 16, 2019 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution
Once we enter our covered call writing trades, we immediately go into position management mode. In August, 2018, Mike generously shared with me a series of trades he executed using Brooks Automation, Inc and asked for my evaluation of his management of these trades....
Feb 9, 2019 | Investment Basics, Option Trading Basics, Technical Analysis
Implied volatility is a key concept for covered call writers and put-sellers. It is a forecast of the underlying stock’s volatility as implied by option prices in the marketplace. In 2012, I published an article relating to implied volatility where volatility...
Feb 2, 2019 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Trade Execution, Stock Option Strategies
When entering our covered call trades with new positions, we buy the stock and immediately sell the option. This can be accomplished by legging-in or using a buy-write combination form. This is an important guideline because we will be assured of capturing our initial...
Podcast