When entering our covered call trades with new positions, we buy the stock and immediately sell the option. This can be accomplished by legging-in or using a buy-write combination form. […]
Why Covered Call Writing Outperforms the Overall Market
Why should we spend the time to educate ourselves on how to implement and manage covered call writing trades? The answer is simple: Once the 3 required skills (stock selection, […]
Buying Low and Selling High Also Applies to Option-Selling
Covered call writers hold two positions. We are long (own) the stock and short (sold) the call option. It is intuitive to investors that it is to our advantage if […]
Factors to Consider When Closing a Trade Early: A Real-Life Example with ATVI
Exit strategies for covered call writing includes closing a trade when share price rises above the original strike price sold. When formulating these decisions, we must factor in the cost-to-close […]
Rolling Down Our Put Positions: When and Why?
Rolling Down Our Put Positions: When and Why? When selling cash-secured puts, our breakeven stock price is the (out-of-the-money) strike price less the put premium. Our exit strategy guideline […]
Arbitrage: Part I
Understanding stock and option pricing requires an awareness of arbitrage and market efficiency. Although most retail investors do not have the tools to take advantage of arbitrage opportunities, a comprehensive understanding of […]
Beware of High Premium Returns
Covered call writers and put-sellers must set goals regarding targeted premium returns before entering trades. These objectives are based on personal risk tolerance, market assessment and chart technicals. One of […]
When Strikes Move Deep In-The-Money: A Real-Life Trade
Covered call writing exit strategies include scenarios when share price moves up or down. Our main enemy is share depreciation where we need to mitigate losses but we must also […]
Setting Up a Covered Call Trade by First Selling an Out-Of-The-Money Put
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 […]
What is the Best Time to Execute Our Trades?
Covered call writing and selling cash-secured puts involve buying and selling stocks and options. We work meticulously to do everything possible to throw the odds in our favor to result in successful […]
Podcast
- 114. The Poor Man's Covered Call Selecting the Best LEAPS Strikes
- 113. How to Select the Best Strikes for Collar Trades
- 112. Using Covered call Options and Stock Dividends in Low Interest Rate Environments
- 111. Rolling Down on a Sharp Market Decline at the end of a Contract
- 110. Exit Strategies Are Important But Must Be Timed Properly
- 109. Delta and Strike Selection for Covered call Writing
- 108. Establishing Our Cost Basis in a Multi Step Managed Trade
- 107: Even and Odd Stock Splits Understanding Contract Adjustments
- 106. "Hitting a Double" with Procter & Gamble: A Covered Call Writing Exit Strategy
- 105. The Poor Man's Covered Call: Rolling Options
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