Analyzing a 3-Income Covered Call Writing Trade: A Real-Life Example with Ready Capital Corp. (NYSE: RC)

Analyzing a 3-Income Covered Call Writing Trade: A Real-Life Example with Ready Capital Corp. (NYSE: RC)

Feb 25, 2023 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies

Covered call writing with out-of-the-money (OTM) strikes provides the opportunity for 2 incomes streams, 1 from option premium and the other from share appreciation from current market value up to the OTM strike. Many of our eligible securities also generate quarterly...
How to Manage Cash-Secured Put Trades Around an Earnings Report: A Real-Life Example with Etsy, Inc. (Nasdaq: ETSY)

How to Manage Cash-Secured Put Trades Around an Earnings Report: A Real-Life Example with Etsy, Inc. (Nasdaq: ETSY)

Feb 4, 2023 | Exit Strategies, Investment Basics, Option Trading Basics, Options Trade Execution, Put-selling, Stock Option Strategies

When selling covered calls or cash-secured put options, we must avoid the risk of earnings reports. This is an important rule of the BCI methodology. This article will detail how a series of put trades were managed during the August 2022 contracts from 7/18/2022...
Calculating Realized Option & Unrealized Stock Covered Call Returns at the End of a Contract Cycle

Calculating Realized Option & Unrealized Stock Covered Call Returns at the End of a Contract Cycle

Jan 28, 2023 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies

Accurately calculating our covered call writing returns at the end of each contract cycle can be uncomplicated in some situations and more challenging in others. If we buy a stock at $48.00 and sell the $50.00 call at $1.50 and we allow exercise of an ITM strike...
Rolling-Out Poor Man’s Covered Call Trades: A Real-Life Example with Alphabet Inc. (Nasdaq: GOOG)

Rolling-Out Poor Man’s Covered Call Trades: A Real-Life Example with Alphabet Inc. (Nasdaq: GOOG)

Jan 21, 2023 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies

When the Poor Man’s Covered Call (PMCC) strategy is employed, the short call is the active leg of the trade. If a strike is expiring in-the-money (ITM), we can roll the short call to a later expiration date. This article will detail 2 possible rolling trades...
How to Use the Capital Adjustment Section of the Trade Management Calculator When Executing Multiple Exit Strategies in the Same Contract Cycle

How to Use the Capital Adjustment Section of the Trade Management Calculator When Executing Multiple Exit Strategies in the Same Contract Cycle

Jan 14, 2023 | Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Put-selling, Stock Option Strategies

Exit strategies for covered call writing and selling cash-secured parts are integral aspects of our trading system. It is critical to learn how to enter, calculate and archive these position management trades. This article will detail one example of this process using...