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Using Implied Volatility to Determine Safe Strikes for Portfolio Overwriting: A Real-Life Example with PayPal Holdings, Inc. (Nasdaq: PYPL)

Portfolio overwriting is a covered call writing-like strategy. We use it with our long-term buy-and-hold portfolios in non-sheltered accounts with the objectives to generate additional cash-flow while still retaining the shares. Share retention is a required objective to avoid potential negative capital gains tax issues. In my books and online videos, I suggest a 6% […]

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Rolling Out and Up to ITM and OTM strikes: A Real-Life Example with Invesco QQQ Trust (Nasdaq: QQQ) + Trade Management Calculator Coupon Expires 5/15/2022

When our covered call writing strikes are expiring in-the-money (ITM), and we want to retain the underlying shares for the next contract period, we can roll the option forward. This involves buying back the current short call(s) and selling the next month (or week etc.) strike. If we roll-out, we always roll-out to an ITM […]

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Determining Our Goal Before Unwinding Both Legs of a Covered Call Trade: A Real-Life Example with Qualcomm Incorporated (Nasdaq: QCOM) + Trade Management Calculator Discount Coupon Expiring Soon

When share price accelerates exponentially with our covered call writing stocks, the strike moves deeper in-the-money. Although the intrinsic-value component of the option premium rises, the time-value component approaches zero. This creates an opportunity to consider our mid-contract unwind exit strategy. Before implementing this, or any others in our exit strategy arsenal, we must identify […]

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Exit Strategy Considerations When a Strike Moves Deep ITM Early in a Contract + The BCI Trade Management Calculator/New Book Now Available- Discount Coupons

When our covered call writing and put-selling trades start out much better than anticipated, Blue Collar Investors immediately evaluate our exit strategy arsenal to see if we can achieve even higher returns. On 11/12/2021, one of our premium members shared with me a trade he had initiated with Big 5 Sporting Goods Corp. (Nasdaq: BGFV) […]

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Analyzing the Cost-To-Close a Covered Call Trade Mid-Contract: A Real-Life Example with NVDIA Corp. (Nasdaq: NVDA)

One of our covered call writing exit strategies is the mid-contract unwind (MCU) exit strategy. We generally implement this approach when share price accelerates significantly leaving the short call deep in-the-money (ITM).   Breaking down the components of a deep ITM strike As the strike moves deeper in-the-money as share price rises, the time-value component […]

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Rolling-Out to Impressive Profits: A Real-Life Example with NVIDIA Corp. (Nasdaq: NVDA)

Exit strategies for covered call writing will elevate returns and mitigate losses. When share price accelerates dramatically, we can take advantage of these opportunities by rolling our options out or out-and-up. In November of 2021, Calvin shared with me a series of trades he executed with NVDA which demonstrated several rules and guidelines that will […]

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Analyzing a Multi-Faceted Series of Covered Call Trades: A Real-Life Example with Kohl’s Corp. (NYSE: KSS)

When we write a covered call option, we first buy a stock or exchange-traded fund (ETF) and then sell the call option which is protected by first owning the underlying security. This is what makes our position covered or partially protected. In November 2021, Avi wrote to me regarding a series of trades he executed […]

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Large Returns Can Be Enticing: We Must Do the Math to Make Sensible Trades + Free Webinar Registration Link + New Book & Calculator

Our covered call writing and put-selling trades initially generate cash into our brokerage accounts. The amount of cash can be impressive on the surface but we must break down the components of these premiums, calculate our potential returns and measure the risk inherent in these contract obligations. In November of 2021, Peter wrote me and […]

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Covered Call Writing Strike Selection in Bull, Bear and Neutral Markets: A Real-Life Example with Crocs, Inc. (Nasdaq: CROX) + April Free Webinar Registration Link

Covered call writing strike selection will vary from investor-to-investor. There is no single parameter that will guide us to the most appropriate strikes for our portfolios. Factors that must be considered are personal risk-tolerance, initial time-value return goal range and overall market assessment.   Personal risk-tolerance The type of underlying securities we use and the […]

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A 6-Income Stream Monthly Cash-Secured Put: A Real-Life Example with InMode Ltd. (Nasdaq: INMD)

Is it true that when we sell cash-secured puts, our maximum return is the initial put premium? Come on now, we’ve all heard and read that statement. This article will demonstrate how I generated a 6-income stream series of trades by executing, and then managing, a 10-Delta Monthly cash-secured put with INMD from 9/20/2021 through […]

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