Rolling-up in the same contract month is generally not a covered call writing exit strategy implemented in our BCI methodology. One of our members shared with me a series of trades he executed with F where a 6-month call was written in August 2021 for a 2/18/2022 expiration. This article will breakdown the mathematical components […]
Rolling Out and Up to ITM and OTM strikes: A Real-Life Example with Invesco QQQ Trust (Nasdaq: QQQ) + Trade Management Calculator Coupon Expires 5/15/2022
When our covered call writing strikes are expiring in-the-money (ITM), and we want to retain the underlying shares for the next contract period, we can roll the option forward. This involves buying back the current short call(s) and selling the next month (or week etc.) strike. If we roll-out, we always roll-out to an ITM […]
Determining Our Goal Before Unwinding Both Legs of a Covered Call Trade: A Real-Life Example with Qualcomm Incorporated (Nasdaq: QCOM) + Trade Management Calculator Discount Coupon Expiring Soon
When share price accelerates exponentially with our covered call writing stocks, the strike moves deeper in-the-money. Although the intrinsic-value component of the option premium rises, the time-value component approaches zero. This creates an opportunity to consider our mid-contract unwind exit strategy. Before implementing this, or any others in our exit strategy arsenal, we must identify […]
Exit Strategy Considerations When a Strike Moves Deep ITM Early in a Contract + The BCI Trade Management Calculator/New Book Now Available- Discount Coupons
When our covered call writing and put-selling trades start out much better than anticipated, Blue Collar Investors immediately evaluate our exit strategy arsenal to see if we can achieve even higher returns. On 11/12/2021, one of our premium members shared with me a trade he had initiated with Big 5 Sporting Goods Corp. (Nasdaq: BGFV) […]
Analyzing the Cost-To-Close a Covered Call Trade Mid-Contract: A Real-Life Example with NVDIA Corp. (Nasdaq: NVDA)
One of our covered call writing exit strategies is the mid-contract unwind (MCU) exit strategy. We generally implement this approach when share price accelerates significantly leaving the short call deep in-the-money (ITM). Breaking down the components of a deep ITM strike As the strike moves deeper in-the-money as share price rises, the time-value component […]
Rolling-Out to Impressive Profits: A Real-Life Example with NVIDIA Corp. (Nasdaq: NVDA)
Exit strategies for covered call writing will elevate returns and mitigate losses. When share price accelerates dramatically, we can take advantage of these opportunities by rolling our options out or out-and-up. In November of 2021, Calvin shared with me a series of trades he executed with NVDA which demonstrated several rules and guidelines that will […]
Analyzing a Multi-Faceted Series of Covered Call Trades: A Real-Life Example with Kohl’s Corp. (NYSE: KSS)
When we write a covered call option, we first buy a stock or exchange-traded fund (ETF) and then sell the call option which is protected by first owning the underlying security. This is what makes our position covered or partially protected. In November 2021, Avi wrote to me regarding a series of trades he executed […]
Making a Great Covered Call Trade Even Better: A Real-Life Example with Revolve Group, Inc. (NYSE: RVLV)
Covered call writing trades, when structured and managed properly, can result in impressive short-term and annualized returns. Such was the case with Art who shared with me a series of trades he executed with RVLV in August – September 2021. The returns were outstanding and enhanced via exit strategy execution. This article will analyze the […]
When to Roll Options on Successful Trades: A Real-Life Example with iShares MSCI India ETF (BATS: INDA)
Exit strategies for covered call writing are an inherent part of our BCI methodology. They allow us to mitigate losses, enhance gains and even turn losses into gains. There will be times when find ourselves in situations where it not 100% clear whether we should pull the trigger on one of our exit strategies versus […]
Closing a Covered Call Trade Mid-Contract: A Real-Life Example with Nucor Corp. (NYSE: NUE)
What happens when a covered call writing trade progresses much better than anticipated? This article will analyze a series of trades executed by William (thanks for sharing) with NUE as he utilized the BCI mid-contract unwind exit strategy. What rules and guidelines should we use to determine if closing both legs of our covered call […]
Podcast
- 99. Anatomy of a Reverse Stock Split
- 98. Analyzing LEAPS Options for the Poor Man's Covered Call
- 97. Managing Our Poor Man's Covered Call Trades When Share Price Drops Substantially
- 96. Protecting Our Covered Call Trades: Protective Puts and In-the-Money Strikes
- 95. Covered Call Writing to Generate Premium and Dividend Income
- 94. Covered Call Writing Net Debit Limit Orders
- 93. WHEN CALL STRIKES MOVE DEEP ITM EARLY IN A CONTRACT
- 92. Selling Deep OTM Cash-Secured Puts to Create High-Probability Returns
- 91. Portfolio Overwriting Analyzed
- 90. Entering a Collar Trade
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