Jul 9, 2016 | Investment Basics, Option Trading Basics, Options Calculations
Covered call writers and put-sellers are always looking for an edge. Some may wonder which option Delta would make the best option-selling candidate. Intuitively or from experience we know that at-the-money strikes (Deltas near 0.50) generate the highest initial...
Jul 2, 2016 | Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Put-selling, Stock Option Strategies
Selling out-of-the-money cash-secured puts is a fantastic way to buy a stock at a discount. It can be used in lieu of setting limit orders. If exercised, our cost basis is the put strike minus the put premium generated. If unexercised, we get paid not to buy the...
Jun 25, 2016 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Put-selling, Stock Option Strategies
“Selling cash-secured puts is the exact same strategy as covered call writing”. We hear that over and over…except that it’s not. These two strategies have the same risk/reward profiles and that is why the claim is made so frequently. On page...
Jun 18, 2016 | Covered Call Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Covered call writing and selling cash-secured puts are considered conservative, low-risk option strategies. Naked option trading is acknowledged to be a more speculative approach to trading options. In the case of covered call writing especially, this is confirmed by...
Jun 11, 2016 | Exchange-Traded Funds, Investment Basics, Option Trading Basics, Options Calculations, Put-selling, Stock Option Strategies
Covered call writing and put-selling can be used in most market conditions including bear markets. In my books and DVDs, I detail the use of in-the-money call options (strikes lower than current market value), out-of-the-money put options (also lower than current...
Jun 4, 2016 | Exchange-Traded Funds, Investment Basics, Option Trading Basics, Options Calculations, Put-selling, Stock Option Strategies
Covered call writing involves buying a stock and selling a call option. When a put is also purchased to avoid significant downside loss, it is referred to as a protective put and the strategy as a whole is referred to as a collar. When a put option is purchased on the...
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