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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
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 […]
Beware of Leveraged ETFs; The Changing Face of Exchange-Traded Funds
How would you feel if your best friend and next door neighbor was metamorphasizing into a monster? A Dr. Jekyll and Mr. Hyde if you will. Could that be happening to our old friend, the Exchange Traded Fund? The historical definition of an ETF is a security that tracks an index, a commodity or a basket […]
Exchange Traded Funds (ETFs) and Covered Call Writing
Would you like a quick, easy, inexpensive and still safe way to invest with covered call writing? If so, why not consider using exchange traded funds? In chapter 14 of my first book, Cashing in on Covered Calls, I discuss diversification and dollar cost averaging as an investment strategy and how that approach can be utilized when […]
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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