Aug 11, 2012 | Option Trading Basics, Options Calculations
Option trading basics incorporates fundamental, technical and common sense decisions. One of these, as it relates to covered call writing, is selecting a strike price for the short options position. In bearish and volatile markets I tend to favor the in-the-money...
Jul 28, 2012 | Options Calculations
Options calculations are critical to maximizing covered call returns. The Elite version of the Ellman Calculator is an important tool in guiding us to making the best possible investment decisions. The Basic Ellman Calculator contains the following tabs: Intro Single...
Jun 18, 2012 | Option Trading Basics, Options Calculations, Stock Option Strategies
Whenever a study is performed on covered call writing a stock is selected and the nearest out-of-the-money (O-T-M) strike price is sold. This is repeated over and over and then the results are compared to the overall market performance. The usual conclusion is that...
May 5, 2012 | Option Trading Basics, Options Calculations, Stock Option Strategies
In the BCI methodology for covered call writing we use predominantly 1-month options. There are times, however, where we find cash in our accounts (mid-contract) that is inactive. This may be due to closing a position early either because the share price declined...
Mar 10, 2012 | Options Calculations
Selling stock options is all about generating a cash flow. Calculating our initial profit, the potential for more profit (upside potential) and the protection of our initial profit (downside protection as opposed to breakeven of the entire position) is critical in...
Nov 26, 2011 | Options Calculations
I sell predominantly one-month options. This decision was NOT based on anything I read or was told, but rather on experience and common sense. Most stocks with options have at least four expiration cycles affiliated with them at any point in time…the current...
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