May 25, 2019 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
Mastering exit strategies is the 3rd required skill for successful covered call writing and put-selling. On November 28, 2018, Nirav wrote to me regarding a series of trades he executed and wanted to know how to categorize the position management aspect of these...
May 18, 2019 | Investment Basics, Option Trading Basics, Options Calculations, Stock Investing, Stock Option Strategies
Portfolio overwriting is a covered call writing alternative strategy where out-of-the-money call options are sold against long-term buy-and-hold positions. Generally, these stocks are of a low cost-basis and generate dividend income. We want to avoid assignment to...
May 11, 2019 | Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Put-selling, Stock Investing, Stock Option Strategies
Selling cash-secured puts can be used to generate monthly cash flow and to buy a stock at a discount. It can also be used to lower the cost-basis of shares already owned. In November 2018, John shared with me a trade he was in with Halliburton Company (NYSE: HAL)...
May 4, 2019 | Fundamental Analysis, Investment Basics, Option Trading Basics, Stock Investing, Stock Option Strategies
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...
Apr 27, 2019 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Stock Investing, Stock Option Strategies
One of our covered call writing exit strategies is converting dead money to cash profits (CDMCP). When share price is declining and under-performing the overall market, we first close the short call and then sell the stock. The cash generated from the sale of the...
Apr 13, 2019 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Trade Execution, Stock Option Strategies
Exit strategy opportunities must be taken advantage of with our covered call writing and put-selling trades. When there is a significant overall market decline in the short-term, there will be losses. Our job, as option-sellers, is to mitigate those losses using our...
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