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, then rolling-down and then rolling-out. All of our trades serve as learning opportunities and these ELV trades are no exceptions. ELV trades from 11/7/2022 […]

Evaluating a Series of Multi-Rolling Covered Call Trades: A Real-Life Example with Elevance Health Inc. (NYSE: ELV)
Posted on May 27, 2023 by Alan Ellman in Covered Call Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies

Analyzing a Covered Call Trade Over 2 Expiration Cycles: A Rea-Life Example with Interactive Brokers Group (Nasdaq: IBKR)
Posted on May 20, 2023 by Alan Ellman in Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution
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 share price of IBKR declined after entering the trade and a decision to retain the shares for the next cycle and the (now) out-of-the-money call […]

Multiple Applications of the Mid-Contract Unwind (MCU) Exit Strategy: A Real-Life Example with Super Micro Computer, Inc. (Nasdaq: SMCI)
Posted on May 13, 2023 by Alan Ellman in Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
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 a trade turned against him, and he wasn’t sure how to enter it into the BCI Trade Management Calculator. Both legs of the covered call […]

Application of the 20%/10% Guidelines for ITM & OTM Strikes + Registration Form for Thursday’s Webinar
Posted on May 5, 2023 by Alan Ellman in Covered Call Exit Strategies, Exchange-Traded Funds, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
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 calls based on our BCI 20%/10% guidelines. We instruct our broker to buy back the short call if the value reaches 20% (in the 1st […]

Analyzing a Defensive Turned Aggressive Covered Call Trade: A Real-Life Example with Select Sector SPDR Utilities (NYSE: XLU)
Posted on April 29, 2023 by Alan Ellman in Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
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 overall market assessment, chart technical pattern and personal risk-tolerance. We should also have a plan in place should share value move up or down significantly […]

The Poor Man’s Covered Call: How to Re-Structure a Potentially Losing Trade into a Winning One
Posted on April 22, 2023 by Alan Ellman in Covered Call Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
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 our PMCC trades, we must make sure it aligns with our required initial structuring formula. This will allow us to close our PMCC trades at […]

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
Posted on April 15, 2023 by Alan Ellman in Covered Call Exit Strategies, Exchange-Traded Funds, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution
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 have written to me over the years regarding a “can’t lose” portfolio overwriting strategy that will return 1% – 2% per-month by selling out-of-the-money (OTM) […]

How to Record & Calculate ITM Covered Call Trades that Become OTM Trades
Posted on April 8, 2023 by Alan Ellman in Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
To properly analyze our covered call writing and put-selling trades, we must accurately record each step of the trades such that initial and final results are accurate. In this article, a hypothetical covered call trade which starts out in-the-money (ITM) but ends up out-of-the-money (OTM) at contract expiration will be analyzed. The BCI Trade Management […]

Technical Analysis for Options: A Real-Life Example with Deckers Outdoor Corp. (NYSE: DECK)
Posted on March 25, 2023 by Alan Ellman in Investment Basics, Option Trading Basics, Options Trade Execution, Stock Option Strategies, Technical Analysis
In our BCI methodology, we use a 3-pronged approach to screening for our covered call writing and put-selling portfolios: Fundamental analysis (sales & earnings Technical analysis (trend, volume and momentum) Common-sense principles (minimum trading volume, avoiding earnings reports among others) This article will focus in on the technical analysis of DECK on 10/20/2022 and show […]

Establishing 84% Probability of Success Put Trades in Bear Markets
Posted on March 18, 2023 by Alan Ellman in Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Put-selling, Stock Option Strategies
Selling deep out-of-the-money cash-secured puts in bear markets will provide us with additional protection to the downside in return for lower, but still significant, option returns. This article will highlight the use of Delta and implied volatility to establish a framework for executing such trades with n 84% probability of success. What is Delta? […]
Podcast
- 104. Special 1 Time Dividends and Contract Adjustments
- 103. The Collar Strategy Using Long-Term Put Expirations
- 102. Analyzing Market Assessment Based on Portfolio Setup
- 101. Covered Call Writing: "Hitting a Double" on the Last day of a Contract
- 100. Analyzing LEAPS for The Poor Man's Covered call Strategy (PMCC)
- 99. Anatomy of a Reverse Stock Split
- 98. Analyzing LEAPS Options for the Poor Man's Covered Call
- 97. Managing Our Poor Man's Covered Call Trades When Share Price Drops Substantially
- 96. Protecting Our Covered Call Trades: Protective Puts and In-the-Money Strikes
- 95. Covered Call Writing to Generate Premium and Dividend Income
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Recent Posts
- Evaluating a Series of Multi-Rolling Covered Call Trades: A Real-Life Example with Elevance Health Inc. (NYSE: ELV)
- BCI PODCAST 104: Special 1 Time Dividends and Contract Adjustments
- Analyzing a Covered Call Trade Over 2 Expiration Cycles: A Rea-Life Example with Interactive Brokers Group (Nasdaq: IBKR)
- Multiple Applications of the Mid-Contract Unwind (MCU) Exit Strategy: A Real-Life Example with Super Micro Computer, Inc. (Nasdaq: SMCI)
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Beginners Corner Enhanced & Updated
- Lesson 1: Beginner's Corner for Covered Call Writing: 2nd Edition
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- Lesson 3: Beginner's Corner for Covered Call Writing- Stock Selection
- Lesson 4: Beginner's Corner for Covered Call Writing-2nd Edition
- Lesson 5: Beginner's Corner for Covered Call Writing
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Beginners Corner Selling-Puts
- Lesson 1: What Is Puts Selling?
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- Lesson 5:puts-selling-Calculating Returns
- Lesson 6:puts-selling-Executing Put-Selling
- Lesson 7:puts-selling- Exit Strategies
- Lesson 8:puts-selling-Mastering Put-Selling
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