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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 […]

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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 […]

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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 […]

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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 […]

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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 […]

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Options That Expire Weekly and Conventional Expiration Cycles

There’s a new man in town! A relatively new options product is now available called the Weekly Options Series or Weeklys. These weekly expiration options are listed on a Thursday and […]

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Factors that Determine the Value of your Option Premium

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? […]

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Theta-Time Decay of our Option Premiums

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 […]

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Non-Standard Options- What they are and why we should avoid them

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 […]

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Derivatives- Stock Options and More

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 […]

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