Oct 7, 2017 | Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Put-selling, Stock Option Strategies
When selling cash-secured puts our position management skills include buying back the short puts under certain circumstances. These include situations when share price moves up or down dramatically. When share price declines below the breakeven, we start losing money....
Sep 30, 2017 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Never sell a covered call or cash-secured put option if there is an upcoming earnings report prior to contract expiration. I have been emphasizing this rule for over a decade in my books, DVDs, seminars and videos. There are times, however, when we have confidence in...
Sep 23, 2017 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
When we sell a covered call and share price rises dramatically, there is a tendency to roll up in order to capture additional future share appreciation. The most common reason for a gap-up in price is a favorable earnings report. In mid-May 2017 Tim wrote me about a...
Sep 16, 2017 | Investment Basics, Option Trading Basics, Options Calculations, Put-selling
Selling cash-secured puts requires us to master the three required skills: stock (or ETF) selection, option selection and position management. This article will highlight how to select a put strike based on our overall market assessment. Market assessment data...
Sep 9, 2017 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations
When we write a covered call, there is a trader or market-maker buying that call on the other side of the trade. We know that as expiration approaches, the time value of options tends to approach zero (Theta effect). With that in mind I received an email from Marcos...
Sep 2, 2017 | Exchange-Traded Funds, Investment Basics, Option Trading Basics, paper trading, Stock Option Strategies
Using covered call writing and exchange-traded funds (ETFs) is a viable approach to generating monthly cash flow. I personally use this strategy in my mother’s portfolio. Can this investment style be expanded to include inverse ETFs to move this expanded path to...
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