beginners corner
Archive | Covered Call Exit Strategies RSS feed for this section
covered call writing exit strategies

Managing Covered Call Trades While Working A Full-Time Job

Covered call writing is a popular and potentially highly rewarding strategy geared to retail investors. But most blue collar investors work 9-5 jobs and managing investment positions can be challenging if no common sense plan is in place. The purpose of this article is to discuss ways that we can keep track of our positions […]

17 Comments Continue Reading →
Covered call writing exit strategies

Real Life Covered Call Trade With PRLB

Part of our covered call writing education involves looking back on both successful and unsuccessful trades and learning from them. A few months ago I shared with a premium member a trade I had executed the previous month and saved it (I have a collection of dozens of email responses for future blog articles or […]

9 Comments Continue Reading →
Rolling options strategies

Rolling Out And Up To Capture Share Appreciation: A Good Idea?

Covered call writing has some drawbacks as do all investment strategies. Profit limitation by the strike price is one such disadvantage. How do we manage a situation where the price of the stock moves well above the strike sold? Some covered call writers will roll out and up (to a higher strike price and a […]

7 Comments Continue Reading →
rolling out and covered call writing

Rolling Weekly Options & Covered Call Writing

The stock option strategies in our BCI methodology are based on years and decades of real-life trading experience. The information detailed in my books and DVDs is geared to giving us the best chance to achieve the highest possible covered call writing returns. This article is different. It is meant to start a conversation and […]

11 Comments Continue Reading →
Technical analysis and covered call writing

Technical Analysis and Covered Call Decisions: Looking Back At KORS

Technical analysis is an integral part of our covered call writing decisions for both stock and option selections. It also impacts our exit strategy decisions. KORS has been a favorite of Blue Collar Investors for quite some time as a frequent member of our Premium Stock List. For the week of September 16th through the […]

11 Comments Continue Reading →
Portfolio overwriting and ex-dividend dates

Using Covered Call Writing To Increase The Returns From A Buy And Hold Portfolio: Part II

Last week I wrote Part I of an article on portfolio overwriting, a covered call-like strategy for buy and hold portfolios. In today’s article I will walk you through the process of how this strategy can be accomplished. Keep in mind that there are many ways to approach any given strategy, this is one of […]

7 Comments Continue Reading →
portfolio overwriting and ex-dividend dates

Using Covered Call Writing To Increase The Returns From A Buy And Hold Portfolio: Part I

Covered call writing is a conservative strategy that encompasses a great deal of inherent application flexibility. In my first 3 books and DVD Programs I have discussed the use of LEAPS as a stock surrogate, protective puts, the use of cash-secured puts to enter a covered call trade at a discount and portfolio overwriting. In […]

10 Comments Continue Reading →
P&L graph showing the importance of exit strategies when covered call writing

Profit And Loss Graphs For Covered Call Writing

Covered call writing, like most investment strategies, has a certain risk/reward profile relating to potential profits and losses. A profit and loss graph  is a  graphical representation of the potential outcomes of this or other strategies. Let’s first have a look at a generic P&L graph: Components of a P&L graph Vertical axis represents the […]

11 Comments Continue Reading →
In-the-money strikes and early exercise

When And Why Will My In-The-Money Strike Be Exercised?

Covered call writers receive option premiums for undertaking the obligation to sell our shares to the option holder if that holder decides to exercise that right. Understanding when and why exercise will take place is critical to the implementation of appropriate exit strategies and therefore maximizing our option and stock profits. Let’s first look at […]

9 Comments Continue Reading →
OTO: one triggers other order

Covered Call Writing: Setting Up A Stop Loss Order

Successful covered call writing requires the appropriate use of exit strategies to mitigate losses and enhance gains. In today’s article, we will focus on actions that can be taken when a stock price declines and capital preservation becomes a concern. Once we enter our covered call position we are in two distinct trades. We are long […]

9 Comments Continue Reading →