When Our Covered Call Strike Moves $1000.00 In-The-Money

When Our Covered Call Strike Moves $1000.00 In-The-Money

Mar 20, 2021 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies

This really happened. From March to August 2020, many of the large cap technology stocks were on fire. Thor shared with me a covered call trade he executed with Amazon.com, Inc. (NASDAQ: AMZN) where the strike moved $1000.00 in-the-money (ITM) as share price headed to...
Establishing Our Cost-Basis When Rolling Out-And-Up on 2 Different Days

Establishing Our Cost-Basis When Rolling Out-And-Up on 2 Different Days

Feb 13, 2021 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies

One of our covered call writing exit strategies is rolling-out-and-up. We use this position management technique when our short call is in-the-money (ITM) as expiration approaches and we decide to retain the shares for the next contract month (or week). For example,...
Rolling-Down On a Sharp Market Decline at the End of a Contract

Rolling-Down On a Sharp Market Decline at the End of a Contract

Jan 9, 2021 | Covered Call Exit Strategies, Exchange-Traded Funds, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies

Exit strategy opportunities may be created when there is a substantial 1-day market decline and we must be prepared to take advantage of these occasions. In June 2020, there was an 1800 point decline in the Dow 30 due to coronavirus concerns and national unrest...
The Poor Man’s Covered Call: Rolling Options in the Current Contract Month + 15% Holiday Discount Expiring Soon

The Poor Man’s Covered Call: Rolling Options in the Current Contract Month + 15% Holiday Discount Expiring Soon

Dec 19, 2020 | Covered Call Exit Strategies, Exit Strategies, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies

Exit strategies are critical to our overall success whether using traditional covered call writing or the Poor Man’s Covered Call (PMCC). In this article, we will evaluate scenarios when share price both declines and accelerates creating rolling-down and...