Aug 6, 2016 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Put-selling, Stock Option Strategies
Never sell a covered call or a cash-secured put if there is an upcoming earnings report. I will continue to repeat this mandate to ensure that new members will not suffer the financial fallout from a disappointing earnings report. There are times, however, when we...
Jul 30, 2016 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Exit strategies for covered call writing are critical to the ultimate success we achieve when selling covered call options or cash-secured puts. One of the prime strategies associated with covered call writing when share price declines is the 20%/10% guideline. This...
Jul 16, 2016 | Covered Call Exit Strategies, Exit Strategies, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
Exit strategies for covered call writing and selling cash-secured puts all start with buying back the option. Frequently, the cost to close our short option positions will be less than the premium generated initially from the option sale. This is because of the impact...
Jul 9, 2016 | Investment Basics, Option Trading Basics, Options Calculations
Covered call writers and put-sellers are always looking for an edge. Some may wonder which option Delta would make the best option-selling candidate. Intuitively or from experience we know that at-the-money strikes (Deltas near 0.50) generate the highest initial...
Jul 2, 2016 | Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Put-selling, Stock Option Strategies
Selling out-of-the-money cash-secured puts is a fantastic way to buy a stock at a discount. It can be used in lieu of setting limit orders. If exercised, our cost basis is the put strike minus the put premium generated. If unexercised, we get paid not to buy the...
Jun 25, 2016 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Put-selling, Stock Option Strategies
“Selling cash-secured puts is the exact same strategy as covered call writing”. We hear that over and over…except that it’s not. These two strategies have the same risk/reward profiles and that is why the claim is made so frequently. On page...
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