Latest Insights in Stock Market Investing
Buyers Have Rights, Sellers Have Obligations: Covered Call Writing in a Nutshell
Covered call writers get paid cash when selling call options. Call buyers pay cash to own the options. This article will highlight the reasons options are bought and sold as it relates to covered call writing. We will use a real-life example with CarMax, Inc. (NYSE:...
BCI Podcast 6. Trade Management with BRKS
Watch Video: Listen To Audio Version: Exit strategy opportunities allow us to mitigate losses and enhance gains. When these events present themselves we must be prepared to take advantage of them. However, we must also be sure that taking action will benefit our trade...
REITS: Good Covered Call Writing Candidates? A Real-Life Example with PennyMac Mortgage Investment Trust (NYSE: PMT)
REITs (real estate investment trusts) invest directly in income-producing real estate and is traded like a stock. In September 2019, Clifton wrote to me about PMT inquiring if it would make a viable covered call writing candidate. He pointed out that this security...
Adjusting Target Goals with ETFs
Exchange-traded funds are baskets of stocks some going up and others going down in price. Generally, this makes these securities less volatile than individual stocks. Lower implied volatility translates into lower option premiums. Of course, there are exceptions but...
BCI Podcast 4. Managing News Drive Gap Downs
Watch Video: Listen To Audio Version: After entering a covered call or put-selling trade and bad news comes out causing share price to gap-down, we must be prepared to take mitigating action. This video reviews the philosophical and practical steps we must take to...
Dividend Yield Should Be a Secondary Factor When Selecting Stocks for Our Covered Call Writing Portfolio
Combining covered call writing premiums with high dividend yields can be an enticing investment approach. In October 2019, Gerry wrote to me about using MPLX LP (NYSE: MPLX) in her option-selling portfolio and pointed to the generous dividend yield and real-estate...
Put-Call Parity and Arbitrage Opportunities
Put-call parity is a principle that defines the relationship between the price of European put options and European call options of the same stock, strike price, and expiration date. The formula can identify arbitrage opportunities where the simultaneous buying and...
Mid-Contract Unwind Exit Strategy at the End of a Contract
Exit strategies for covered call writing and sell cash-secured puts is one of the 3-required skills that must be mastered. The mid-contract unwind (MCU) exit strategy is used for covered calls when share price moves substantially above the strike price, leaving the...
Strike Selection Using Technical Analysis and Market Assessment
Stock and option selection are 2 of the 3-required skills essential to successful covered call writing (position management is the 3rd). There is no one factor that will dictate our choices but rather a mosaic of bits of information which will lead us to the best...
Podcast
- 126. Analyzing the Status of a Rolling-Down Trade
- 124. Dividends and After-Hours News Causing Exercise of OTM Call Strikes
- 123. Implied Volatility, IV Rank and IV Percentile Defined and Practical Applications
- BCI PODCAST 122: Should I Roll-Out My Deep In-The-Money Call Option Mid-Contract?
- BCI PODCAST 121: What is a SPAC (Special Purpose Acquisition Company)?
- 120. Using the Nasdaq-100 Volatility Index (VOLQ) in Covered Call Writing Decisions
- 119. Establishing Our Cost-Basis for Long-Term Holdings
- 118. Adjusting Our Portfolio Mix to Achieve Diversification and Cash Allocation
- 117. When a Covered Call Strike Moves $1000.00 In-The-Money
- 116. How to Execute a Covered Call Trade with a Buy/Write Combination Form
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