beginners corner
Archive | Options Calculations RSS feed for this section

3 Approaches to Strike Selection When Portfolio Overwriting Existing Stocks: A Real-Life Example with Dow, Inc. (NYSE: DOW) + July 11th Webinar Registration Link

Portfolio overwriting is a covered call writing-like strategy where deep out-of-the-money (OTM) calls are sold against our long-term buy-and-hold securities. Typically, these stocks and exchange-traded funds (ETFs) are of a […]

7 Comments Continue Reading →

How to Enter and Archive a Covered Call Trade with 1 Exit Strategy that is Closed at Expiration

After entering our covered call trades, we immediately go into position management mode. Frequently, we can take advantage of a covered call exit strategy opportunity, sometimes more than one. This […]

21 Comments Continue Reading →

How to Adjust a Poor Man’s Covered Call (PMCC) Trade to Align with the BCI Trade Initialization Formula

The PMCC is a covered call writing-like strategy where LEAPS options act as surrogates for the underlying stock or ETF. It is technically called a long call diagonal debit spread […]

13 Comments Continue Reading →

Evaluating a Series of Multi-Rolling Covered Call Trades: A Real-Life Example with Elevance Health Inc. (NYSE: ELV)

In this article, we will analyze a series of covered call trades shared with me by a BCI premium member. These trade executions involve establishing a bullish covered call position, […]

9 Comments Continue Reading →

Analyzing a Covered Call Trade Over 2 Expiration Cycles: A Rea-Life Example with Interactive Brokers Group (Nasdaq: IBKR)

Covered call writing exit strategies can involve trade adjustments over 1 or more expiration cycles. This article will analyze a series of trades shared with me by Ken, where the […]

13 Comments Continue Reading →

Multiple Applications of the Mid-Contract Unwind (MCU) Exit Strategy: A Real-Life Example with Super Micro Computer, Inc. (Nasdaq: SMCI)

Covered call writing exit strategies allow us to mitigate trade losses and enhance trade profits. On 11/30/2022, Paul shares with me a series of trades he executed with SMCI where […]

18 Comments Continue Reading →

Application of the 20%/10% Guidelines for ITM & OTM Strikes + Registration Form for Thursday’s Webinar

One of the key methods to partially automate our covered call writing exit strategy arsenal is to place buy-to-close (BTC), good until cancelled (GTC) limit orders to close our short […]

13 Comments Continue Reading →

Analyzing a Defensive Turned Aggressive Covered Call Trade: A Real-Life Example with Select Sector SPDR Utilities (NYSE: XLU)

When we craft our covered call trades, we must decide if a defensive (in-the-money or ITM calls) or aggressive (out-of-the-money or OTM) position should be established. We base this on […]

12 Comments Continue Reading →

The Poor Man’s Covered Call: How to Re-Structure a Potentially Losing Trade into a Winning One

The Poor Man’s Covered Call is a covered call writing-like strategy where a LEAPS option is used as a surrogate for the actual stock or exchange-traded fund (ETF). When structuring […]

14 Comments Continue Reading →

Understanding the Math When Rolling ITM Covered Calls Out-And-Up: A Real-Life Example with Utilities Select Sector SPDR Fund (NYSE: XLU) + Save the Date May 11th

All strategies, including covered call writing and selling cash-secured puts, have their pros and cons. The same holds true for the exit strategies associated with them. Several of our members […]

12 Comments Continue Reading →