The stock option strategies in our BCI methodology are based on years and decades of real-life trading experience. The information detailed in my books and DVDs is geared to giving us the best chance to achieve the highest possible covered call writing returns. This article is different. It is meant to start a conversation and […]
Covered Call Writing And Contract Adjustments + Our Premium Report Is Getting Even Better
Options Trading Basics includes the fact that one options contract incorporates 100 shares of the underlying security. The right or the obligation is for the purchase or sale of 100 shares of stock or exchange-traded funds. This is the rule but there are exceptions to this rule. From time to time a certain event will […]
Using Covered Call Writing To Increase The Returns From A Buy And Hold Portfolio: Part II
Last week I wrote Part I of an article on portfolio overwriting, a covered call-like strategy for buy and hold portfolios. In today’s article I will walk you through the process of how this strategy can be accomplished. Keep in mind that there are many ways to approach any given strategy, this is one of […]
Using Covered Call Writing To Increase The Returns From A Buy And Hold Portfolio: Part I
Covered call writing is a conservative strategy that encompasses a great deal of inherent application flexibility. In my first 3 books and DVD Programs I have discussed the use of LEAPS as a stock surrogate, protective puts, the use of cash-secured puts to enter a covered call trade at a discount and portfolio overwriting. In […]
Covered Call Writing: 1-Month vs. 2-Month Expiration Dates
Two of the cornerstones of the BCI methodology for covered call writing involves selling options with 1-month expirations and avoiding earnings reports. Several of our astute members have inquired about selling 2-month options instead. The rationale is that all stocks and ETFs have options for the current and next month. The months farther out will […]
Covered Call Writing, Leveraged ETFs, Weekly Options and Protective Puts
Traditional covered call writing consists of buying a stock or exchange-traded fund (ETF) and selling a call option to generate cash flow. Frequently BCI members will think outside the box and add additional strategies and products to create a covered call writing-like strategy. The goal in these cases is not to complicate a realtively straightforward […]
Selling Deep Out Of The Money Covered Call Options
Strike price selection is a critical concept needed to master covered call writing. Selling in-the-money strikes is the most conservative approach to this strategy and selling out-of-the-money strikes is the most bullish. We use the latter when the overall market is bullish and chart technicals are bullish and confirming. Once we have decided that a […]
Profit And Loss Graphs For Covered Call Writing
Covered call writing, like most investment strategies, has a certain risk/reward profile relating to potential profits and losses. A profit and loss graph is a graphical representation of the potential outcomes of this or other strategies. Let’s first have a look at a generic P&L graph: Components of a P&L graph Vertical axis represents the […]
When And Why Will My In-The-Money Strike Be Exercised?
Covered call writers receive option premiums for undertaking the obligation to sell our shares to the option holder if that holder decides to exercise that right. Understanding when and why exercise will take place is critical to the implementation of appropriate exit strategies and therefore maximizing our option and stock profits. Let’s first look at […]
Executing A Covered Call Trade: A Step By Step Look At Our Broker Statement
Executing a covered call trade and understanding the accounting procedures on our online discount broker statements can be confusing to the new option trader. I have recently received a few emails regarding this topic so I thought it would be useful to show an actual trade I made with KORS, a stock on our Premium […]
Podcast
- 50. Exit strategies Must Be Timed Properly
- 49. Analyzing a Multi Leg Covered Call Rolling Down Series of Trades
- 48. Rolling Deep OTM Cash Secured Puts
- 47. Rolling Up in the Same Contract Month
- 46. Should Delta Be the Sole Criteria for Covered Call Writing Strike Selection
- 45. Implied Volatility and Expected price Movement During the Life of Option Contracts
- 44. Can We Use ITM Strikes to Create a No Risk Covered Call Strategy?
- 43. Converting a Covered Call Trade to a Collar Trade
- 42. Why Was My OTM Put Exercised?
- 41. Collar Trades When Call Strikes Move Deep In The Money
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