Covered call writing strike selection will vary from investor-to-investor. There is no single parameter that will guide us to the most appropriate strikes for our portfolios. Factors that must be considered are personal risk-tolerance, initial time-value return goal range and overall market assessment. Personal risk-tolerance The type of underlying securities we use and the […]
A 6-Income Stream Monthly Cash-Secured Put: A Real-Life Example with InMode Ltd. (Nasdaq: INMD)
Is it true that when we sell cash-secured puts, our maximum return is the initial put premium? Come on now, we’ve all heard and read that statement. This article will demonstrate how I generated a 6-income stream series of trades by executing, and then managing, a 10-Delta Monthly cash-secured put with INMD from 9/20/2021 through […]
What is a Delta-Neutral Portfolio?: A Real-Life Example With InMode Ltd. (Nasdaq: INMD) + Free Webinar Registration Links
Many portfolio managers will seek Delta-neutral portfolios to mitigate directional or market risk. This article will explain how these experts calculate their positions to achieve this goal. To simplify the details, a single security will be used but the concepts apply to total portfolio positions as well. Definitions Delta: The amount an option value […]
Collar Trades: The Rationale for Maximum Gains and Losses
Covered call writing trades have 2 legs: the long stock position and the short call. The collar trade adds a third leg, the long protective put. The calculations for potential trade maximum gain or loss can be confusing. This article will break down the mathematics and provide a rationalization for these computations. The 3 […]
Generating a 3-Income Stream Put Trade: A Real-Life Example with ZIM Integrated Shipping Services Ltd. (NYSE: ZIM)
We have all read that when we sell a cash-secured put, the maximum return is the put premium. Is that true 100% of the time? Enter our exit strategy arsenal. On 9/27/2021, Richard shared with me a series of put trades he executed with ZIM. It involved an initial put sale plus 2 BTC and […]
Making a Great Covered Call Trade Even Better: A Real-Life Example with Revolve Group, Inc. (NYSE: RVLV)
Covered call writing trades, when structured and managed properly, can result in impressive short-term and annualized returns. Such was the case with Art who shared with me a series of trades he executed with RVLV in August – September 2021. The returns were outstanding and enhanced via exit strategy execution. This article will analyze the […]
The Poor Man’s Covered Call LEAPS Selection: A Real-Life Example with SPDR S&P 500 ETF Trust (NYSE: SPY)
Before initiating a poor man’s covered call trade (PMCC), we must first master all aspects of the strategy including understanding the pros and cons inherent in this system. Once we have made a decision that this strategy is appropriate for our portfolios, the next step is to analyze our initial trade structuring calculations. We want […]
Using Implied Volatility to Establish Reliable Trading Ranges for Our Option Contracts
PLEASE SEE A REVISION TO THIS ARTICLE AT THE END OF THE POST. I MADE AN ERROR AND REVERSED THE NUMERATOR AND DENOMINATOR IN ONE OF MY CALCULATIONS. THE CONCEPTS ARE ACCURATE BUT THE MATH NEEDED TO BE TWEAKED. I have written several articles on the use of VOLQ (Nasdaq-100 Volatility Index) to establish a […]
When to Roll Options on Successful Trades: A Real-Life Example with iShares MSCI India ETF (BATS: INDA)
Exit strategies for covered call writing are an inherent part of our BCI methodology. They allow us to mitigate losses, enhance gains and even turn losses into gains. There will be times when find ourselves in situations where it not 100% clear whether we should pull the trigger on one of our exit strategies versus […]
Rolling Weekly 10-Delta Put Options Prior to a Holiday Weekend: A Real-Life Example with Etsy, Inc. (Nasdaq: ETSY)
One of the ultra-low-risk strategies developed by BCI in 2o20 involved selling weekly 10-Delta cash-secured puts. This created a greater than 90% probability that the puts would not be exercised (expire in-the-money or with intrinsic-value). Since 2020 – 2021 represented an unusually low interest rate environment, annualized returns of 8% – 15 % looked pretty […]
Podcast
- 83. Setting Up a Portfolio of Nasdaq and S&P 500 Stocks in a User-Friendly Manner
- 82. Risky Stocks Can Result In Challenging Decisions
- 81. Managing ITM Covered Call Strikes When Share Price Moves Higher
- 80. Using the VIX to Achieve Higher Option-Selling Returns
- 79. Adjusting Target Goals with ETFs
- 78. REITS: Good Covered Call Writing Candidates?
- 77. Buyers Have Rights and Sellers Have Obligations- Covered Call Writing Explained
- 76. 5 Top Myths and Misunderstandings about Covered Call Writing
- 75. Reverse Stock Splits Understanding Contract Adjustments
- 74. Strike Selection Using Technical Analysis and Market Assessment
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