Covered call writing (as well as put-selling) premiums are directly related to the implied volatility of the underlying stock or exchange-traded fund (ETF). Biotech stocks are particularly volatile due to the success (or lack thereof) of the pharmaceuticals they are developing. Highly volatile underlyings represent the good news of higher premiums and the bad news […]
Mean Analyst Ratings (MAR)
The screening process for option-selling watchlists includes fundamental analysis, technical analysis and common-sense screens. The BCI team recently added a new screen, the mean analyst rating (MAR), to replace the Scouter Rating (risk/reward) which we had been using for years. This will add an “institutional” component to our analysis. What is MAR? An investment […]
Mean Analyst Rating (MAR): A New Addition to Our Premium Reports
The screening process for option-selling watchlists include fundamental analysis, technical analysis and common-sense screens. The BCI team is now adding a new screen the mean analyst rating (MAR) to replace the Scouter Rating we have been using for years. This will add an “institutional” component to our analysis. What is MAR? An investment analyst […]
Treasury Bond Yields and the Stock Market
Treasury bond yields are followed by stock investors and changes in yield can impact the success of our trades. In particular, the 10-year treasury yield is used as a yardstick for critical financial issues like mortgages. What is bond yield? This is the interest rate paid by the US government for borrowing money when […]
Position Management in the Final Week of a Contract: A Real-Life Example with FIVE
Exit strategy preparation and implementation is one of the 3 required skills for successful covered call writing and put-selling. Because of the time value erosion of our options (Theta), there are limitations regarding the exit strategy opportunities as our contracts near expiration. In January 2018, Duminda contacted me about a trade he executed with Five […]
Combining Dividend Capture with Covered Call Writing: Pros and Cons
Why not use covered call writing with only dividend-bearing stocks to generate three income streams; option premium, share appreciation to the (out-of-the-money) call strike plus the dividend itself? This article will explore the pros and cons of this approach to covered call writing. Strategy theory We screen for stocks that have ex-dividend dates (also […]
Writing Naked Calls on Poorly-Performing Stocks
Selling covered calls and cash-secured puts are the main strategies highlighted in our BCI community. Much of the information disseminated on the Blue Collar site, books and DVDs is based on member feedback, inquiries and comments. In September 2017, Marc sent me an email question about selling naked (without owning the underlying security before selling […]
Inverse Exchange-Traded Funds versus Shorting Stocks
In bear markets, one of the tools we can benefit from with our covered call writing and put-selling strategies is inverse exchange-traded funds (ETFs). An inverse ETF is also known as a short ETF or a bear ETF. These securities are constructed to return the exact opposite performance of a certain benchmark or index. Many […]
Russell Rebalancing Day: A Cause for Concern?
Covered call writers and put-sellers are aware of the value to avoiding risky events like earnings announcements. An impending FDA announcement regarding the efficacy of a new drug being tested is another example. This article will define and explore the potential concerns of trading on or though Russell Rebalancing Day. What is Russell Rebalancing Day? […]
Mitigating Losses After a Disappointing Earnings Pre-Announcement
A critical BCI rule for covered call writing is never to sell an option if there is an upcoming earnings report prior to contract expiration. Earnings reports are risky events we want to avoid. From time-to-time a company will pre-announce earnings especially if there will be a negative story to tell its shareholders when the […]
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Using the CBOE Volatility Index (VIX) for Our Strike Price Selection
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Ask Alan 161 – The Importance of Delta in our Covered Call Writing Decisions
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Covered Puts Are NOT Cash-Secured Puts + Our Best-Ever Covered Call Writing Streaming DVD Program with $50 Discount Coupon
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Collar Trades When Call Strikes Move Deep In-The-Money: A Real-Life Example with TEAM
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Blackjack and Covered Call Writing: Throwing the Odds in Our Favor with PayPal Holdings Inc. (NASDAQ: PYPL)
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The New Stock Market- Algorithmic and High Speed Trading
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Options That Expire Weekly and Conventional Expiration Cycles
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Why the 3% Guideline Applies to Puts but Not to Call Options
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Earnings Pre-Announcements Explained and Categorized
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Tax Implications of Writing Covered Calls against Long-Term Holdings
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Barry B Premium Members, This week’s Weekly Stock Scr
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Jay Hey Sunny, Thank you for that added context. I
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Sunny Jay, I'm asking this because I have some T
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