Will My Broker Automatically Exercise Options That Expire In-The-Money?
We write a covered call or sell a cash-secured put. At expiration, the strike price is in-the-money. For calls that means lower then current market value and for puts it means higher than current market value. To demonstrate the moneyness of these strikes, let’s...
Why and When We are NOT Losing Money If We Buy Back an Option for More Money than We Received
Exit strategies for covered call writing and selling cash-secured puts all start with buying back the option. Frequently, the cost to close our short option positions will be less than the premium generated initially from the option sale. This is because of the impact...
Rolling Up in the Same Contract Month: Comparing Before and After Scenarios
Rolling up is a useful exit strategy for both covered call writing and put-selling. However, in my humble opinion, it rarely benefits us to roll up in the same contract month. The main reason for this conclusion is that we are dealing with a stock that has...
Spin-offs and How they Impact Option Chains and Calculations
Corporate events can impact our covered call writing and put-selling positions in many ways. In today’s article we will focus on spin-offs and how to read an options chain after the event and calculate to moneyness of our options based on the specifics of that...
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Podcast
- 126. Analyzing the Status of a Rolling-Down Trade
- 124. Dividends and After-Hours News Causing Exercise of OTM Call Strikes
- 123. Implied Volatility, IV Rank and IV Percentile Defined and Practical Applications
- BCI PODCAST 122: Should I Roll-Out My Deep In-The-Money Call Option Mid-Contract?
- BCI PODCAST 121: What is a SPAC (Special Purpose Acquisition Company)?
- 120. Using the Nasdaq-100 Volatility Index (VOLQ) in Covered Call Writing Decisions
- 119. Establishing Our Cost-Basis for Long-Term Holdings
- 118. Adjusting Our Portfolio Mix to Achieve Diversification and Cash Allocation
- 117. When a Covered Call Strike Moves $1000.00 In-The-Money
- 116. How to Execute a Covered Call Trade with a Buy/Write Combination Form