Oct 4, 2014 | Option Trading Basics, Options Calculations, Stock Option Strategies
Strike price selection is such a key part of options trading basics and options calculations. There are 3 types of strike prices for both put and call options: in-the-money, at-the-money (and the closely related near-the-money) and out-of-the-money. Moneyness tells...
Sep 27, 2014 | Investment Basics, Option Trading Basics, Stock Option Strategies
The timing of our option trade executions will impact the success of our covered call writing returns. The BCI methodology prides itself on having rules and guidelines for buying back options, re-selling options and selling long stock positions. One question that many...
Sep 13, 2014 | Investment Basics, Option Trading Basics, Stock Option Strategies
Writers of covered calls and cash-secured puts use stocks or exchange-traded funds as the underlying securities. It is the value of these securities that give value to our option premiums. For example, we will buy back an option when share price moves down causing the...
Sep 6, 2014 | Option Trading Basics, Options Calculations, Stock Option Strategies
Mastering the concepts of the time value of our option premiums and how theta impacts our option profits will help elevate our returns to the highest possible levels. Let’s first define these terms: Definitions Time value: The portion of the option premium that...
Aug 30, 2014 | Covered Call Exit Strategies, Investment Basics, Option Trading Basics, Stock Option Strategies
Covered call writing is a low-risk strategy that allows us to generate monthly cash flow by selling stock options. Since we are obligated to sell our shares to the option buyer (holder), one of the understood possibilities is that we will “lose” our shares...
Aug 23, 2014 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
With the rising popularity of stock option strategies and covered call writing in particular, we have seen the creation of more option products like weekly stock options. Weeklys expire each Friday of the month whereas the more traditional monthlys generally expire...
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