Aug 4, 2018 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Whenever a covered call trade results in a maximum return, it is a successful trade…period…end of story. To most, this statement appears nonsensical and self-evident. But I’m here to tell you that there are a lot of covered call writers that question...
Jul 28, 2018 | Investment Basics, Option Trading Basics, Stock Investing, Stock Option Strategies
For covered call writers and put-sellers, the option Greeks play a major role in our understanding of the risks and value of our option premiums. We know our option premiums consist of intrinsic value (for in-the-money strikes) + time value. Our initial time value...
Jul 21, 2018 | Exit Strategies, Investment Basics, Option Trading Basics, Stock Option Strategies
“There is less risk using deep in-the-money (ITM) long calls than buying stock and selling the corresponding short calls”. That is the case John made to me when I received his email in January 2018. As an example, John used a $100.00 stock and a call...
Jul 14, 2018 | Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Put-selling, Stock Option Strategies
Rolling Down Our Put Positions: When and Why? When selling cash-secured puts, our breakeven stock price is the (out-of-the-money) strike price less the put premium. Our exit strategy guideline as to when to close the short put (buy back the put) is when share...
Jul 7, 2018 | Investment Basics, Option Trading Basics, Options Calculations, Stock Investing, Stock Option Strategies
When we formulate our covered call writing and put-selling portfolios, we are basing our decisions on non-emotional sound fundamental, technical and common sense principles. Similarly, we can analyze a portfolio and determine the investor’s stock and overall...
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