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covered call writing and the Ellman Calculator

Writing Covered Calls On Broad Market Exchange-Traded Funds

The initial main step for covered call writers is to select the best underlying security. This choice will vary from investor to investor based on goals and risk tolerance. Some of our members prefer exchange-traded funds (ETFs), a strategy I use in my mother’s portfolio. ETFs offer the advantages of instant diversification, less volatility (in […]

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Covered Call Writing When There Is Overall Market Concern

Covered call writing is a stock option strategy with primary goals of income generation and capital preservation. Most of us are conservative investors who use the power of education to master an investment strategy better than most everyone else using the same strategy. That is what the Blue Collar Investor is all about. In the […]

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Leveraged ETFs and covered call writing

The Mechanics Of Leveraged Exchange-Traded Funds: Appropriate For Covered Call Writers?

Our premium members receive a weekly report of exchange-traded funds (ETFs) appropriate for covered call writing. These lists will never include a leveraged ETF because we  feel that these securities are too risky and suitable only for sophisticated investors with high risk-tolerance. In this article, I will break down the mechanics of how leveraged ETFs […]

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Covered call writing with leveraged ETFs

Covered Call Writing, Leveraged ETFs, Weekly Options and Protective Puts

Traditional covered call writing consists of buying a stock or exchange-traded fund (ETF) and selling a call option to generate cash flow. Frequently BCI members will think outside the box and add additional strategies and products to create a covered call writing-like strategy. The goal in these cases is not to complicate a realtively straightforward […]

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Covered call writing with ETFs

Exchange-Traded Funds: How They Operate: The Pros And The Cons

Covered call writers can use individual stocks or exchange-traded funds as the underlying securities. Each has its own set of advantages and disadvantages. In this article we will explore the mechanism behind ETFs and evaluate the pros and cons of incorporating them into our covered call writing portfolios. When we buy one share of the Qs […]

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Inverse ETFs and covered call writing

Inverse Exchange-Traded Funds and Covered Call Writing

Last month I published an article titled Complex and Leveraged Exchange-Traded Funds. I discussed the goals and risks associated with many of these products. One of the topics examined was Inverse Exchange-Traded Funds. Here is a brief review: Inverse ETFs use derivatives to bet against the direction of financial markets. These are known as short or […]

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Complex ETFs

Complex and Leveraged Exchange-Traded Funds

With more and more Blue Collar Investors using online discount brokers as their trading platforms the need to be aware of the risks of complex and leveraged exchange-traded funds has become critical. Buyer beware! Covered calls can be written on many of these securities but is the risk justified? First let’s review some definitions previously discussed […]

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Covered call writing index

Covered Call Writing and Exchange-Traded Funds

A critical requirement of my covered call writing system is to be properly diversified by stock, industry and cash allocation. No one stock or industry should represent more than 20% of your portfolio holdings. Owning five different stocks in five different industries would require you to own at least 500 shares since each options contract […]

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Covered Call Writing Exchange-Traded Funds

As covered call writers we strive to generate monthly cash flow by selling call options in a conservative, low-risk environment. This approach is quite appealing to many retail investors but many look to fund managers to take advantage of this great strategy. As a result there are now 31 closed-end funds that use covered call […]

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Constructing a Covered Call Portfolio Using Select Sector SPDRS

Select Sector SPDRs are unique exchange-traded funds that divide the S&P 500 into nine sector index funds.  They have the diversity of a mutual fund, the focus of a sector fund, and the tradability of a stock. Together, the nine Select Sector SPDRs represent the S&P 500 as a whole. However, each Select Sector SPDR can also […]

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