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Rolling Weekly 10-Delta Put Options Prior to a Holiday Weekend: A Real-Life Example with Etsy, Inc. (Nasdaq: ETSY)

One of the ultra-low-risk strategies developed by BCI in 2o20 involved selling weekly 10-Delta cash-secured puts. This created a greater than 90% probability that the puts would not be exercised (expire in-the-money or with intrinsic-value). Since 2020 – 2021 represented an unusually low interest rate environment, annualized returns of 8% – 15 % looked pretty […]

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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 […]

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Selling Cash-Secured Puts Exit Strategies: The 3% Guideline: A Real-Life Example with NVIDIA Corp. (Nasdaq: NVDA)

When we sell cash-secured puts, we must use all 3 of our required skills: stock (or ETF) selection, option selection and position management. Once we have selected an elite-performing security, we then choose an out-of-the-money (OTM) put strike that meets our initial time-value return goal range (2% – 4% per-month, for me). Without exit strategies, […]

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Holding a Stock Through an Earnings Report Can Result in Impressive Returns: A Real-Life Example with Crocs, Inc. (Nasdaq: CROX)

One of the golden rules of the BCI methodology is never to sell an option (call or put) when there is an earnings report due out prior to contract expiration. Most of the time we avoid holding these securities in our option-selling portfolios due to the risk inherent in these reports. However, there are exceptions […]

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Was I Correct to Close My Successful Covered Call Trade? A Real-Life Example with Revolve Group, Inc. (NYSE: RVLV)

Alan K asked me to analyze a series of covered call trades he executed with RVLV over a 4-day period. Share price accelerated substantially once the trade was entered and a significant 4-day profit was realized. Let’s investigate all aspects of these trades.   Alan’s trades 6/21/2021: Buy 300 x RVLV at $61.83 6/21/2021: STO […]

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Analyzing Covered Call Writing Trades to Enhance Our Trading Skills: A Real-Life Example with The Clorox Company (Nasdaq: CLX)

One of the best ways to elevate our option-selling results is to analyze real-life trades. On August 3, 2021, Mark shared with me a series of trades he executed with CLX. His conclusion was that he was currently in a $250.00 net credit position. I will break down these trades into 3 stages. I ask […]

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Game Plan When Our Cash-Secured Puts are Exercised

When we sell cash-secured puts, we have selected a stock or ETF based on sound fundamental, technical and common-sense principles. We generally select out-of-the-money put strikes that meet our stated initial time-value return goal range. Once the trade is executed, we move to position management mode. This article will highlight the choices we have available […]

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Rolling-Down to an ITM Strike in the Last Week of a Monthly Contract

When we roll-down our covered call trades, we generally do so to an out-of-the-money (OTM) strike to allow for share price recovery. However, in the final week of a monthly contract, if we hold a security, we will not use in the following contract month, it frequently makes sense to roll-down to an ITM strike. […]

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Explaining “Bought-Up” Value When Rolling a Covered Call Out-And-Up

One of our key covered call writing exit strategies is rolling an option when the strike is in-the-money at expiration and we want to retain our shares. We can roll-out to the same strike at a later date or out-and-up to a higher strike at a later date. For both. there will be an intrinsic-value […]

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Exit Strategies for Covered Call Writing: “Hitting a Triple” with XLU

Benefitting from exit strategies, in our covered call writing and put-selling portfolios, is the result of preparation and opportunity. Our 20%/10% guidelines for covered call writing protects us when share price declines and guides us as when to close the short calls. This allows us take further action including selling the stock, waiting to “hit […]

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