beginners corner
Archive | Option Trading Basics RSS feed for this section

Covered Call Writing: Types of Customer Orders

Executing covered call trades begins when we instruct our online discount brokers what we want them to do for us. When instructing our online discount broker as to the actions […]

26 Comments Continue Reading →

Covered Call Writing: Stock Options with Additional Expiration Months

When studying our option trading basics, we learn that most stock options have four expiration cycles. Some securities also have long-term options (LEAPS) as well as weekly and quarterly expirations. […]

42 Comments Continue Reading →

Covered Call Writing Using The Blue Collar Methodology

Fundamental analysis, technical analysis, common sense principles and calculations are all critical considerations when selling stock options the Blue Collar way. Since this is my first article written on our […]

51 Comments Continue Reading →

Portfolio Management- Organized Lists To Improve Our Option Profits For Covered Call Writing

How to trade options: I am a big believer in setting yourself up for success. This is accomplished through education, motivation, commitment and organization. Investors reading this article and others are […]

38 Comments Continue Reading →

Constructing Your Covered Call Portfolio During Earnings Season

From mid-January to mid-February many of our watch list stocks will be reporting earnings rendering these equities ineligible for covered call writing at least until after the report is announced. This does […]

37 Comments Continue Reading →

Stock Splits and their Impact on our Option Contracts

Definition  A stock split is a change in the number of shares outstanding (in circulation). The number of shares is adjusted by the split ratio, e.g. 3 to 1. In […]

30 Comments Continue Reading →

How to Read an Option Chain

So how much cash can we generate selling options on the stocks that have passed our fundamental and technical screens? The answer lies in the option chain. This is a […]

61 Comments Continue Reading →

The Case for 1-Month Options

I sell predominantly 1-month options. This decision was NOT based on anything I read or was told, but rather on experience and common sense. Most stocks with options have at […]

34 Comments Continue Reading →

The Risk-Reward Profile for Covered Call Writing

(I am writing this article because I have had feedback in the past from investors who reject covered call writing based solely on the theoretical risk-rewrad profile.) A risk reward profile […]

55 Comments Continue Reading →

Penny Pilot Program

Do you get frustrated when something doesn’t make sense? Me too. Here’s an example: You’re viewing an options chain of a great-performing stock in a great-performing industry and you note […]

64 Comments Continue Reading →