How to Adjust a Poor Man’s Covered Call (PMCC) Trade to Align with the BCI Trade Initialization Formula

How to Adjust a Poor Man’s Covered Call (PMCC) Trade to Align with the BCI Trade Initialization Formula

Jun 3, 2023 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies

The PMCC is a covered call writing-like strategy where LEAPS options act as surrogates for the underlying stock or ETF. It is technically called a long call diagonal debit spread and has the advantage of lower cost to enter the trade when compared to traditional...
Evaluating a Series of Multi-Rolling Covered Call Trades: A Real-Life Example with Elevance Health Inc. (NYSE: ELV)

Evaluating a Series of Multi-Rolling Covered Call Trades: A Real-Life Example with Elevance Health Inc. (NYSE: ELV)

May 27, 2023 | Covered Call Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies

In this article, we will analyze a series of covered call trades shared with me by a BCI premium member. These trade executions involve establishing a bullish covered call position, then rolling-down and then rolling-out. All of our trades serve as learning...
Analyzing a Covered Call Trade Over 2 Expiration Cycles: A Rea-Life Example with Interactive Brokers Group (Nasdaq: IBKR)

Analyzing a Covered Call Trade Over 2 Expiration Cycles: A Rea-Life Example with Interactive Brokers Group (Nasdaq: IBKR)

May 20, 2023 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution

Covered call writing exit strategies can involve trade adjustments over 1 or more expiration cycles. This article will analyze a series of trades shared with me by Ken, where the share price of IBKR declined after entering the trade and a decision to retain the shares...
Multiple Applications of the Mid-Contract Unwind (MCU) Exit Strategy: A Real-Life Example with Super Micro Computer, Inc. (Nasdaq: SMCI)

Multiple Applications of the Mid-Contract Unwind (MCU) Exit Strategy: A Real-Life Example with Super Micro Computer, Inc. (Nasdaq: SMCI)

May 13, 2023 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies

Covered call writing exit strategies allow us to mitigate trade losses and enhance trade profits. On 11/30/2022, Paul shares with me a series of trades he executed with SMCI where a trade turned against him, and he wasn’t sure how to enter it into the BCI Trade...
Application of the 20%/10% Guidelines for ITM & OTM Strikes + Registration Form for Thursday’s Webinar

Application of the 20%/10% Guidelines for ITM & OTM Strikes + Registration Form for Thursday’s Webinar

May 5, 2023 | Covered Call Exit Strategies, Exchange-Traded Funds, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies

One of the key methods to partially automate our covered call writing exit strategy arsenal is to place buy-to-close (BTC), good until cancelled (GTC) limit orders to close our short calls based on our BCI 20%/10% guidelines. We instruct our broker to buy back the...
Analyzing a Defensive Turned Aggressive Covered Call Trade: A Real-Life Example with Select Sector SPDR Utilities (NYSE: XLU)

Analyzing a Defensive Turned Aggressive Covered Call Trade: A Real-Life Example with Select Sector SPDR Utilities (NYSE: XLU)

Apr 29, 2023 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies

When we craft our covered call trades, we must decide if a defensive (in-the-money or ITM calls) or aggressive (out-of-the-money or OTM) position should be established. We base this on overall market assessment, chart technical pattern and personal risk-tolerance. We...