Aug 22, 2010 | Option Trading Basics
So you sold an options contract for $380 and generated a 3.5% 1-month return. Did you ever wonder how the market determined the value of that contract to be $380? The simple equation that most of us know and understand is the following: Option premium = Intrinsic...
Jun 6, 2010 | Option Trading Basics
Educated covered call writers know that it is critical to sell our options early in the 1-month cycle. I always try to sell my options in the first week of a 4-week expiration cycle and no later than the beginning of the second week of a 5-week cycle. The reason has...
Jan 3, 2010 | Option Trading Basics
You do your due-diligence and select a great performing stock in a great performing industry. Once you have determined that this equity meets all of our system requirements, you head off to the option chains to check the calculations. Since the stock is trading @ $39...
Dec 6, 2009 | Option Trading Basics
All center fielders are baseball players but not all baseball players are center fielders. In much the same way, stock options are derivatives but not all derivatives are stock options. A derivative is a financial instrument whose value is “derived” from...
Jan 4, 2009 | Option Trading Basics
Definitions: Implicit in the term covered call writing is the fact that we are selling call options. They are covered because we first own the underlying equities prior to selling the option. Since this is my first article of the new year and given the fact that we...
Oct 26, 2008 | Option Trading Basics
This past Thursday and Saturday I conducted a webinar series attended by investors throughout the United States and Canada. I am humbled by the response and supportive emails that you sent during and after the presentations. Thank you. Investors had the opportunity to...
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