Rolling-down is one of our frequently used covered call writing exit strategies. During the January 2022 contracts, there was a 5% market decline due to COVD-19, inflation and interest rate concerns. This article will highlight a rolling-down strategy I implemented with Healthcare Select Sector SPDR (NYSE: XLV) in one of my portfolios where a 4.68% […]
Exit Strategy Choices After Exercise of a Cash-Secured Put: A Real-Life Example with Etsy, Inc. (Nasdaq: ETSY) + Free Webinar Registration Link
How do we manage our trades after allowing exercise of a cash-secured put? This gameplan must be in place prior to entering the put trade. In this article, I will compare 2 strategy choices, writing a weekly covered call or implementing the stock repair strategy. I will be highlighting a real-life trade taken from one […]
Using The Put-Call-Put (PCP) Strategy to Create Downside Protection on Steroids
Covered call writing and selling cash-secured puts are low-risk option-selling strategies that lower our cost-basis and generate cash-flow as we seek to beat the market on a consistent basis. By integrating both strategies, we construct a multi-tiered option-selling strategy which will both generate significant cash-flow plus offer substantial downside protection. In our BCI community, we […]
Rolling-Up in the Same Contract Month: A Real-Life Example with Ford Motor Company (NYSE: F)
Rolling-up in the same contract month is generally not a covered call writing exit strategy implemented in our BCI methodology. One of our members shared with me a series of trades he executed with F where a 6-month call was written in August 2021 for a 2/18/2022 expiration. This article will breakdown the mathematical components […]
Rolling Out and Up to ITM and OTM strikes: A Real-Life Example with Invesco QQQ Trust (Nasdaq: QQQ) + Trade Management Calculator Coupon Expires 5/15/2022
When our covered call writing strikes are expiring in-the-money (ITM), and we want to retain the underlying shares for the next contract period, we can roll the option forward. This involves buying back the current short call(s) and selling the next month (or week etc.) strike. If we roll-out, we always roll-out to an ITM […]
Determining Our Goal Before Unwinding Both Legs of a Covered Call Trade: A Real-Life Example with Qualcomm Incorporated (Nasdaq: QCOM) + Trade Management Calculator Discount Coupon Expiring Soon
When share price accelerates exponentially with our covered call writing stocks, the strike moves deeper in-the-money. Although the intrinsic-value component of the option premium rises, the time-value component approaches zero. This creates an opportunity to consider our mid-contract unwind exit strategy. Before implementing this, or any others in our exit strategy arsenal, we must identify […]
Exit Strategy Considerations When a Strike Moves Deep ITM Early in a Contract + The BCI Trade Management Calculator/New Book Now Available- Discount Coupons
When our covered call writing and put-selling trades start out much better than anticipated, Blue Collar Investors immediately evaluate our exit strategy arsenal to see if we can achieve even higher returns. On 11/12/2021, one of our premium members shared with me a trade he had initiated with Big 5 Sporting Goods Corp. (Nasdaq: BGFV) […]
Analyzing the Cost-To-Close a Covered Call Trade Mid-Contract: A Real-Life Example with NVDIA Corp. (Nasdaq: NVDA)
One of our covered call writing exit strategies is the mid-contract unwind (MCU) exit strategy. We generally implement this approach when share price accelerates significantly leaving the short call deep in-the-money (ITM). Breaking down the components of a deep ITM strike As the strike moves deeper in-the-money as share price rises, the time-value component […]
Rolling-Out to Impressive Profits: A Real-Life Example with NVIDIA Corp. (Nasdaq: NVDA)
Exit strategies for covered call writing will elevate returns and mitigate losses. When share price accelerates dramatically, we can take advantage of these opportunities by rolling our options out or out-and-up. In November of 2021, Calvin shared with me a series of trades he executed with NVDA which demonstrated several rules and guidelines that will […]
Analyzing a Multi-Faceted Series of Covered Call Trades: A Real-Life Example with Kohl’s Corp. (NYSE: KSS)
When we write a covered call option, we first buy a stock or exchange-traded fund (ETF) and then sell the call option which is protected by first owning the underlying security. This is what makes our position covered or partially protected. In November 2021, Avi wrote to me regarding a series of trades he executed […]
Podcast
- 83. Setting Up a Portfolio of Nasdaq and S&P 500 Stocks in a User-Friendly Manner
- 82. Risky Stocks Can Result In Challenging Decisions
- 81. Managing ITM Covered Call Strikes When Share Price Moves Higher
- 80. Using the VIX to Achieve Higher Option-Selling Returns
- 79. Adjusting Target Goals with ETFs
- 78. REITS: Good Covered Call Writing Candidates?
- 77. Buyers Have Rights and Sellers Have Obligations- Covered Call Writing Explained
- 76. 5 Top Myths and Misunderstandings about Covered Call Writing
- 75. Reverse Stock Splits Understanding Contract Adjustments
- 74. Strike Selection Using Technical Analysis and Market Assessment
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