May 10, 2014 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Covered call writing is a strategy that can be applied in several different manners. I have written about generating monthly cash flow, the main reason we use this great strategy. But it also can be used to augment long-term buy-and-hold portfolios, enhance dividend...
May 3, 2014 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
LEAPS are long-term options with expirations usually greater than 1 year. Some investors buy LEAPS instead of stocks to then write covered calls on this leveraged type of security. This is related to, but not recisely the same, as traditional covered call writing. The...
Apr 26, 2014 | Investment Basics, Option Trading Basics, Stock Option Strategies
Covered call writing generates monthly cash flow by selling short-term options. The main factor in determining the amount of this premium is the implied volatility (IV) of the underlying security. The effect that IV has on the premium is known as vega, one of the...
Apr 19, 2014 | Investment Basics, Option Trading Basics, Stock Option Strategies
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. recently sent me an excellent question that...
Apr 12, 2014 | Investment Basics, Option Trading Basics, Stock Investing, Stock Option Strategies
Options trading basics teaches us that the VIX or CBOE Volatility Index demonstrates the market’s expectation of 30-day volatility. It measures market risk and is also known as the investor fear gauge. With this in mind, covered call writers are faced with a...
Apr 5, 2014 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Covered call exit strategies plays a major role in mitigating losses in our BCI methodology. In most cases, we can keep losses to a minimum, turn losses into gains and enhance profits as well. Some covered call writers want the security of protecting against a...
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