May 16, 2020 | Investment Basics, Option Trading Basics, Options Calculations, Stock Investing, Stock Option Strategies
Covered call writers get paid cash when selling call options. Call buyers pay cash to own the options. This article will highlight the reasons options are bought and sold as it relates to covered call writing. We will use a real-life example with CarMax, Inc. (NYSE:...
May 9, 2020 | Investment Basics, Option Trading Basics, Options Calculations, Stock Investing, Stock Option Strategies
REITs (real estate investment trusts) invest directly in income-producing real estate and is traded like a stock. In September 2019, Clifton wrote to me about PMT inquiring if it would make a viable covered call writing candidate. He pointed out that this security...
May 2, 2020 | Exchange-Traded Funds, Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies, Technical Analysis
Exchange-traded funds are baskets of stocks some going up and others going down in price. Generally, this makes these securities less volatile than individual stocks. Lower implied volatility translates into lower option premiums. Of course, there are exceptions but...
Apr 25, 2020 | Exchange-Traded Funds, Fundamental Analysis, Investment Basics, Option Trading Basics, Stock Option Strategies, Technical Analysis
Combining covered call writing premiums with high dividend yields can be an enticing investment approach. In October 2019, Gerry wrote to me about using MPLX LP (NYSE: MPLX) in her option-selling portfolio and pointed to the generous dividend yield and real-estate...
Apr 18, 2020 | Investment Basics, Just Alan, Option Trading Basics, Options Calculations, Stock Option Strategies
Put-call parity is a principle that defines the relationship between the price of European put options and European call options of the same stock, strike price, and expiration date. The formula can identify arbitrage opportunities where the simultaneous buying and...
Apr 11, 2020 | Covered Call Exit Strategies, Exchange-Traded Funds, Exit Strategies, Investment Basics, Option Trading Basics, Options Trade Execution, Stock Option Strategies
Exit strategies for covered call writing and sell cash-secured puts is one of the 3-required skills that must be mastered. The mid-contract unwind (MCU) exit strategy is used for covered calls when share price moves substantially above the strike price, leaving the...
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