May 8, 2021 | Exchange-Traded Funds, Fundamental Analysis, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Investing, Stock Option Strategies, Technical Analysis
Covered call writers and sellers of cash-secured puts know the importance of portfolio diversification. If one security under-performs, the others can compensate. This article will demonstrate how to craft a portfolio of large-cap tech and blue-chip companies for our...
Apr 24, 2021 | Exchange-Traded Funds, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
One of the most popular exchange-traded funds (ETFs) used as underlyings for covered call writing is Invesco QQQ Trust (Nasdaq: QQQ) which consists of 100 of the largest domestic and international non-financial companies listed on the Nasdaq exchange. It is the ETF I...
Apr 10, 2021 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Exit strategy opportunities for covered call writing must be recognized and acted upon when indicated. It is important to understand when and how to react to these situations and determine the best exit strategy, if any. In October 2020, Patrick shared with me a...
Mar 27, 2021 | Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
Covered call trades can be entered by legging-in (2 separate trades) or via the buy/write combination form (1 net trade). When available, the latter is an effective, and perhaps cheaper, way to execute our covered call trades when the bid-ask spreads of our options...
Mar 20, 2021 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
This really happened. From March to August 2020, many of the large cap technology stocks were on fire. Thor shared with me a covered call trade he executed with Amazon.com, Inc. (NASDAQ: AMZN) where the strike moved $1000.00 in-the-money (ITM) as share price headed to...
Mar 6, 2021 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
When we initiate a covered call trade by first buying a stock and then selling a call option, our cost-basis, in the BCI methodology, is the lower of the stock price or strike price. If we sell an in-the-money (ITM) strike, we deduct the intrinsic-value component of...
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