Sep 28, 2019 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Trade Execution, Put-selling, Stock Option Strategies
When we sell covered calls or cash-secured puts, we understand that if a strike ends up in-the-money at expiration, that option will be exercised over the weekend and shares will be sold or purchased depending on the option type (for calls, our shares are sold; for...
Sep 21, 2019 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
When we sell and in-the-money or at-the-money strike and share price moves up substantially, we have an unrealized maximum return. On 4/5/2019, Doug wrote to me about such a situation he was in with Alexion Pharmaceuticals, Inc. (NASDAQ: ALXN). He was considering...
Sep 14, 2019 | Fundamental Analysis, Investment Basics, Option Trading Basics, Stock Investing, Stock Option Strategies
Stock selection is the first of 3-required skills essential to become an elite option-seller. Option selection and position management are the other two. On 3/31/2019, Sunny wrote to me inquiring about 2 stocks, Edwards Lifesciences Corp. (NASDAQ: EW) and Regeneron...
Sep 7, 2019 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Investing, Stock Option Strategies
Covered call writing is a low-risk cash-generating strategy. It is not a no-risk strategy. As we become educated and master the 3-required skills (stock selection, option selection and position management), it is understandable why BCI members try to figure out...
Aug 31, 2019 | Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution
The goals of covered call writing include generating monthly cash flow and preserving capital. We use every fundamental, technical and common-sense principle available to maximize our profits and protect our cash. Paul A. previously sent me an excellent question that...
Aug 24, 2019 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Position management (exit strategies) is one of the 3-required skills for successful covered call writing and put-selling. “Hitting a double” involves buying back the short call using our 20%/10% guidelines and then re-selling that same option when share...
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