May 21, 2022 | Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
Portfolio overwriting is a covered call writing-like strategy. We use it with our long-term buy-and-hold portfolios in non-sheltered accounts with the objectives to generate additional cash-flow while still retaining the shares. Share retention is a required objective...
May 14, 2022 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
When our covered call writing strikes are expiring in-the-money (ITM), and we want to retain the underlying shares for the next contract period, we can roll the option forward. This involves buying back the current short call(s) and selling the next month (or week...
May 7, 2022 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution
When share price accelerates exponentially with our covered call writing stocks, the strike moves deeper in-the-money. Although the intrinsic-value component of the option premium rises, the time-value component approaches zero. This creates an opportunity to consider...
Apr 16, 2022 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
Exit strategies for covered call writing will elevate returns and mitigate losses. When share price accelerates dramatically, we can take advantage of these opportunities by rolling our options out or out-and-up. In November of 2021, Calvin shared with me a series of...
Apr 9, 2022 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
When we write a covered call option, we first buy a stock or exchange-traded fund (ETF) and then sell the call option which is protected by first owning the underlying security. This is what makes our position covered or partially protected. In November 2021, Avi...
Apr 2, 2022 | Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
Our covered call writing and put-selling trades initially generate cash into our brokerage accounts. The amount of cash can be impressive on the surface but we must break down the components of these premiums, calculate our potential returns and measure the risk...
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