Exit strategies for covered call writing are critical components to our overall success. One of the strategies available to us is hitting a double. This is where we buy back the short call and wait for the stock price to recover allowing us to re-sell the same option. This creates 2 income streams in the […]
Covered Call Writing with TLT: Generating Premium and Dividend Income
The main goal of covered call writing is to generate option premium cash flow. Many investors also seek to develop dividend income in addition to the option premium revenue. One security that presents a unique scenario is iShares 20+ Year Treasury Bond ETF (NASDAQ: TLT). This exchange-traded fund produces dividend income twelve times a year with […]
Entering a Collar Trade: A Real-Life Example with iShares Silver Trust (NYSE: SLV) + New Product with Discount Coupon
The collar strategy is a covered call writing-like strategy where a protective put is added to the covered call trade. In this article, the initial structuring of a collar trade will be highlighted using SLV, an eligible exchange-traded fund in our Premium ETF Report in August 2020. The 3-legs of a collar trade STOCK: […]
Bear Market Concerns and our Option-Selling Portfolios
Covered call writing and selling cash-secured puts are stock option strategies with primary goals of income generation and capital preservation. Most of us are conservative investors who seek to beat the market on a consistent basis while minimizing portfolio risk. This is one of the mission statements of the BCI methodology. In the past few […]
Setting Up a Portfolio of NASDAQ and S&P 500 Stocks In a User-Friendly and Time-Efficient Manner + New Products and Discount Coupons
Many covered call writers and put-sellers favor a portfolio mix of blue-chip and tech companies and turn to the S&P 500 and the Nasdaq exchange for locating the best underlying securities. Since this benchmark and exchange total nearly 4000 stocks, locating an elite portfolio can be an overwhelming task. This article will present an approach […]
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 covered call writing with ETFs will usually provide better diversification and less risk at the expense […]
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 component as the reasons for this consideration. In the BCI methodology, we use fundamental […]
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 deep in-the-money. One of the characteristics of a deep ITM strike is […]
Is This Trade a Winner or a Loser?: A Real-Life Example with XLE
Covered call writers must understand and evaluate the success (or lack thereof) of our trades. Simply stated, are they winners or losers? In June 2019, Van shared with me trades he executed with the exchange-traded fund (ETF), Energy Select Sector SPDR Fund (NYSE: XLE). He was trying to categorize his trade as a winner or […]
Analyzing 4-Day and 2-Month Trades with XBI
Mario was generous in sharing his covered call writing trades with SPDR S&P Biotech ETF (NYSE: XBI). The trades were executed over a 2-month time-frame, the last of which was a 4-day Weekly option. Mario’s trades with XBI 4/17/2019: Buy XBI at $84.95 4/17/2019 – 6/2019: Sell calls and “hit doubles” to lower cost-basis […]
Podcast
- 29. How to Structure a Poor Man's Covered Call Trade
- 28. In the Money Covered Calls to Protect in Bear Markets
- 27. Using Mean Analyst rating MAR in the Stock Screening Process
- 26. Selling Cash Secured Puts to Lower Cost Basis
- 25. “Hitting a Double” with Procter & Gamble Covered Call Writing Exit Strategies
- 24. Using Covered Call Writing and Stock Dividends in Low Interest Rate Environments
- 23. Covered Call Writing with Weekly Options Portfolio Overwriting with Weeklys
- 22. A Covered Call Writing Alternative to Rolling Up in the Same Contract Month
- 21. When To Execute Our Option Selling Trades
- How to set up a covered call writing portfolio using stock selection, option & position management
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