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Rolling Weekly 10-Delta Put Options Prior to a Holiday Weekend: A Real-Life Example with Etsy, Inc. (Nasdaq: ETSY)

One of the ultra-low-risk strategies developed by BCI in 2o20 involved selling weekly 10-Delta cash-secured puts. This created a greater than 90% probability that the puts would not be exercised (expire in-the-money or with intrinsic-value). Since 2020 – 2021 represented an unusually low interest rate environment, annualized returns of 8% – 15 % looked pretty […]

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Understanding 1-Time Special Cash Dividends and Our Current Trade Status: A Real-Life Example with OMF

Contract adjustments will change the parameters of our covered call writing and put-selling trades but will not result in any trade loss or gain. The Options Clearing Corporation (OCC) will make alterations to our option contracts such that buyers and sellers of calls and put are made whole after the corporate event. On August 6, […]

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Comparing Implied Volatility and Delta When Establishing Projected Trading Ranges During Our Option Contracts

In 2020, BCI developed 2 ultra-low-risk option strategies, one using implied volatility and the other using Delta to establish low- and high-end trading ranges during our covered call writing and put-selling option contracts. We will use 5 real-life examples to analyze the trading ranges predicted by each approach. The data was taken on 8/30/2021 for […]

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Collar Strategy Using Weekly Calls and Monthly Puts: A Real-Life Example with LABU

The collar strategy is a covered call writing-like strategy where protective puts are added to our covered call trades. This creates a ceiling (the short call) and a floor (the long put). Typically, the expiration dates of the calls and puts are the same. We must also ensure that the call credit and put debit […]

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Closing a Covered Call Trade Mid-Contract: A Real-Life Example with Nucor Corp. (NYSE: NUE)

What happens when a covered call writing trade progresses much better than anticipated? This article will analyze a series of trades executed by William (thanks for sharing) with NUE as he utilized the BCI mid-contract unwind exit strategy. What rules and guidelines should we use to determine if closing both legs of our covered call […]

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Selling Cash-Secured Puts Exit Strategies: The 3% Guideline: A Real-Life Example with NVIDIA Corp. (Nasdaq: NVDA)

When we sell cash-secured puts, we must use all 3 of our required skills: stock (or ETF) selection, option selection and position management. Once we have selected an elite-performing security, we then choose an out-of-the-money (OTM) put strike that meets our initial time-value return goal range (2% – 4% per-month, for me). Without exit strategies, […]

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Holding a Stock Through an Earnings Report Can Result in Impressive Returns: A Real-Life Example with Crocs, Inc. (Nasdaq: CROX)

One of the golden rules of the BCI methodology is never to sell an option (call or put) when there is an earnings report due out prior to contract expiration. Most of the time we avoid holding these securities in our option-selling portfolios due to the risk inherent in these reports. However, there are exceptions […]

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Was I Correct to Close My Successful Covered Call Trade? A Real-Life Example with Revolve Group, Inc. (NYSE: RVLV)

Alan K asked me to analyze a series of covered call trades he executed with RVLV over a 4-day period. Share price accelerated substantially once the trade was entered and a significant 4-day profit was realized. Let’s investigate all aspects of these trades.   Alan’s trades 6/21/2021: Buy 300 x RVLV at $61.83 6/21/2021: STO […]

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Analyzing Covered Call Writing Trades to Enhance Our Trading Skills: A Real-Life Example with The Clorox Company (Nasdaq: CLX)

One of the best ways to elevate our option-selling results is to analyze real-life trades. On August 3, 2021, Mark shared with me a series of trades he executed with CLX. His conclusion was that he was currently in a $250.00 net credit position. I will break down these trades into 3 stages. I ask […]

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Monitoring Our Collar Trades with the BCI Collar Calculator

The collar trade is a covered call writing trade with a protective put. The active leg of the trade is the short call. When exit strategy opportunities present, we make the appropriate trade adjustments. These can be incorporated into our BCI Collar Calculator. This article will highlight a hypothetical trade where the short call is […]

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