Jan 9, 2021 | Covered Call Exit Strategies, Exchange-Traded Funds, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
Exit strategy opportunities may be created when there is a substantial 1-day market decline and we must be prepared to take advantage of these occasions. In June 2020, there was an 1800 point decline in the Dow 30 due to coronavirus concerns and national unrest...
Dec 26, 2020 | Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Investing, Stock Option Strategies
Contract adjustments to the terms of our covered call writing and put-selling options are due to corporate actions like mergers and acquisitions, special dividends and stock splits. This article will highlight the contract alterations resulting from special dividends...
Dec 19, 2020 | Covered Call Exit Strategies, Exit Strategies, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
Exit strategies are critical to our overall success whether using traditional covered call writing or the Poor Man’s Covered Call (PMCC). In this article, we will evaluate scenarios when share price both declines and accelerates creating rolling-down and...
Dec 12, 2020 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
After entering our covered call writing trades, we immediately enter our 20% buy-to-close (BTC) limit orders. This will automate the process to close our short calls in the first half of a monthly contract should share price decline significantly. This article will...
Dec 5, 2020 | Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
Contract adjustments to the terms of our covered call writing and put-selling options are due to corporate actions like mergers and acquisitions (see the thread on last week’s blog commentary regarding AAN), special dividends and stock splits. Stock splits fall...
Nov 28, 2020 | Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
The Poor Man’s Covered Call (PMCC), also known as a long call diagonal debit spread, is where deep in-the-money (ITM) LEAPS options are used in place of the long stock position. As with all strategies, the PMCC has its advantages and disadvantages but the main...
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