Jun 3, 2023 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
The PMCC is a covered call writing-like strategy where LEAPS options act as surrogates for the underlying stock or ETF. It is technically called a long call diagonal debit spread and has the advantage of lower cost to enter the trade when compared to traditional...
May 20, 2023 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution
Covered call writing exit strategies can involve trade adjustments over 1 or more expiration cycles. This article will analyze a series of trades shared with me by Ken, where the share price of IBKR declined after entering the trade and a decision to retain the shares...
May 13, 2023 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
Covered call writing exit strategies allow us to mitigate trade losses and enhance trade profits. On 11/30/2022, Paul shares with me a series of trades he executed with SMCI where a trade turned against him, and he wasn’t sure how to enter it into the BCI Trade...
May 5, 2023 | Covered Call Exit Strategies, Exchange-Traded Funds, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
One of the key methods to partially automate our covered call writing exit strategy arsenal is to place buy-to-close (BTC), good until cancelled (GTC) limit orders to close our short calls based on our BCI 20%/10% guidelines. We instruct our broker to buy back the...
Apr 29, 2023 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
When we craft our covered call trades, we must decide if a defensive (in-the-money or ITM calls) or aggressive (out-of-the-money or OTM) position should be established. We base this on overall market assessment, chart technical pattern and personal risk-tolerance. We...
Apr 15, 2023 | Covered Call Exit Strategies, Exchange-Traded Funds, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution
All strategies, including covered call writing and selling cash-secured puts, have their pros and cons. The same holds true for the exit strategies associated with them. Several of our members have written to me over the years regarding a “can’t...
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