Jun 17, 2017 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Stock Investing, Stock Option Strategies
Never sell a covered call option or cash-secured put if there is an earnings report due out prior to contract expiration. This is one of the golden rules of the BCI methodology. We know that a report that disappoints generally did not meet market consensus regarding...
Jun 10, 2017 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
In our BCI methodology we favor Monthly or Weekly options for our short covered call writing positions. I am frequently asked why I don’t utilize LEAPS options (expire 9 – 24 months in the future) to garner a much higher premium and perhaps require less...
Jun 3, 2017 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies, Technical Analysis
When selling covered call or put options, strike price selection is one of the three required skills. Here are the main factors we evaluate when determining which strike price to select: Overall market assessment Personal risk tolerance Return goals Technical price...
May 27, 2017 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Put-selling, Stock Option Strategies
A covered call trade can be initiated by first purchasing the underlying stock or exchange-traded fund (ETF). It can also be launched by first selling an out-of-the-money (OTM) cash-secured put and allowing exercise if the put strike is in-the-money (ITM) at...
May 13, 2017 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Many assume that covered call writing is a zero sum game because we have traders executing equal but opposite trades using the same underlying security. As a covered call writer, we may sell 5 contracts of AAPL which means there is a buyer out there who just bought...
May 6, 2017 | Investment Basics, Option Trading Basics, Options Calculations, Put-selling, Stock Option Strategies
Many consider covered call writing and selling cash-secured puts the same strategy with the same risk-reward profiles. To me, they are similar with slight differences that must be understood to make a decision as to which strategy to favor. In the end, it will be like...
Podcast