Dec 23, 2016 | Investment Basics, Option Trading Basics, Stock Option Strategies, Stock Trading & Taxes
Stock splits are corporate events where the number of shares in circulation changes as well as the price -per-share. If we own 100 shares at $50.00 per share pre-split and the stock splits 2-for-1, then we will own 200 shares at $25.00 post-split. The value of our...
Dec 17, 2016 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
After executing our covered call writing trades, we immediately prepare for position management opportunities…exit strategies. One of these strategies in our arsenal is the Mid Contract Unwind exit strategy. This is used when share value appreciates dramatically...
Dec 10, 2016 | Investment Basics, Option Trading Basics, Put-selling, Stock Option Strategies
An accepted myth is that covered call writing and selling cash-secured puts are precisely the same strategy. The reason this statement is generally accepted by many investors is that they have the same risk-reward profiles or profit and loss graphs: In this...
Nov 26, 2016 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Stock Option Strategies
Covered call writers and put-sellers know that options should never be sold when there is an upcoming earnings report prior to contract expiration. This is one of the most important rules in the BCI methodology. The reason is the result of the inherent risk we are...
Nov 19, 2016 | Investment Basics, Option Trading Basics, Options Trade Execution, Stock Investing, Stock Option Strategies
Stock and ETF (exchange-traded fund) selection is one of the three required skills needed to achieve the highest level of success when selling options. Covered call writers and put-sellers have varying degrees of personal risk tolerance and trading styles. As a...
Nov 12, 2016 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Stock Option Strategies
Covered call writing and selling cash-secured puts obligates us to buy or sell shares at the strike price by the expiration date. Exercise will generally occur if the strike is in-the-money by 4 PM ET on expiration Friday (usually the 3rd Friday of the month)....
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