Latest Insights in Stock Market Investing
Russell Rebalancing Day: A Cause for Concern?
Covered call writers and put-sellers are aware of the value to avoiding risky events like earnings announcements. An impending FDA announcement regarding the efficacy of a new drug being tested is another example. This article will define and explore the potential...
Beware of High Premium Returns
Covered call writers and put-sellers must set goals regarding targeted premium returns before entering trades. These objectives are based on personal risk tolerance, market assessment and chart technicals. One of the most flagrant mistakes made by option sellers is to...
Mitigating Losses After a Disappointing Earnings Pre-Announcement
A critical BCI rule for covered call writing is never to sell an option if there is an upcoming earnings report prior to contract expiration. Earnings reports are risky events we want to avoid. From time-to-time a company will pre-announce earnings especially if there...
Executing Trades Based on Ex-Dividend Dates
Early assignment of our covered call positions is rare but possible. When it does occur, it is frequently related to an ex-dividend date. These are dates that we must own the shares in order to be eligible to receive the dividend on the distribution date. Premium...
Rolling Out-And-Up in Our Buy-And-Hold Portfolios
Portfolio overwriting is a covered call writing-like strategy where we sell call options against long-term buy-and-hold securities. Generally, these are low-cost basis stocks that are dividend-bearing and trading in non-sheltered accounts. We want to leverage these...
Pros and Cons of Covered Call Writing: Calculation Perspective
Every investment strategy, including covered call writing and selling cash-secured puts, has advantages and disadvantages. When we decide to implement a plan, it is with the understanding that we accept and embrace these pros and cons. It is not productive to look...
Long-Term Capital Gains Enhanced with Covered Call Writing
Covered call writing can be crafted to meet a multitude of trading styles, goals and personal risk tolerances. In this article, I will highlight yet another situation where we may utilize this great strategy. In this common hypothetical, we are preparing to sell a...
Buying Back Put Options When Share Price Gaps Up: A Real-Life Example with AVGO
When selling cash-secured puts our position management skills include buying back the short puts under certain circumstances. These include situations when share price moves up or down dramatically. When share price declines below the breakeven, we start losing money....
Holding a Stock Through an Earnings Report: A Real-Life Example with AVGO
Never sell a covered call or cash-secured put option if there is an upcoming earnings report prior to contract expiration. I have been emphasizing this rule for over a decade in my books, DVDs, seminars and videos. There are times, however, when we have confidence in...
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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