Many portfolio managers will seek Delta-neutral portfolios to mitigate directional or market risk. This article will explain how these experts calculate their positions to achieve this goal. To simplify the details, a single security will be used but the concepts apply to total portfolio positions as well. Definitions Delta: The amount an option value […]

Should Good News Discourage Us From Entering a Covered Call Trade?
We examine the BCI Premium Stock Report on the Sunday May 23, 2021, after expiration Friday, for our Monday trade selections. One of the securities we choose is Applied Materials, Inc. (Nasdaq: AMAT). On Monday morning, May 24th, AMAT gaps up well above the price movement of the S&P 500. Is AMAT now too expensive? […]

Best Technology ETFs for Our Option-Selling Portfolios: QQQ and XLK
When seeking to add a technology presence to our covered call writing and put-selling portfolios, we can do so by using exchange-traded funds (ETFs) based on technology benchmarks. Two such reliable ETFs are Technology Select Sector SPDR Fund (NYSE: XLK) and Invesco QQQ Trust (Nasdaq: QQQ). This article will compare the 2 funds to assist […]

What is a SPAC (Special Purpose Acquisition Company)?
Are SPACs reliable candidates for our covered call writing and put-selling portfolios? This article will define and explain the anatomy of a SPAC so we can decide if they deserve a place in our conservative option-selling portfolios. SPAC defined This is a company with no commercial operations (products or services) that is created to […]

Implied Volatility (IV), IV Rank and IV Percentile: Defined and Practical Applications
When writing covered calls and selling cash-secured puts, the implied volatility of the underlying securities is directly related to the premiums we receive and also measures the risk we are taking with our option-selling trades. We protect ourselves from using IVs that are too high or too low by defining our initial time-value return goal […]
Recent Comments