Sep 21, 2013 | Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
Strike price selection is a critical concept needed to master covered call writing. Selling in-the-money strikes is the most conservative approach to this strategy and selling out-of-the-money strikes is the most bullish. We use the latter when the overall market is...
Sep 7, 2013 | Covered Call Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
Covered call writers receive option premiums for undertaking the obligation to sell our shares to the option holder if that holder decides to exercise that right. Understanding when and why exercise will take place is critical to the implementation of appropriate exit...
Aug 31, 2013 | Covered Call Exit Strategies, Investment Basics, Option Trading Basics, Options Trade Execution, Stock Option Strategies
Successful covered call writing requires the appropriate use of exit strategies to mitigate losses and enhance gains. In today’s article, we will focus on actions that can be taken when a stock price declines and capital preservation becomes a concern. Once we...
Aug 24, 2013 | Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution
Executing a covered call trade and understanding the accounting procedures on our online discount broker statements can be confusing to the new option trader. I have recently received a few emails regarding this topic so I thought it would be useful to show an actual...
Jul 13, 2013 | Investment Basics, Option Trading Basics, Options Trade Execution, Stock Investing, Stock Option Strategies
Covered call writing along with all other stock and option strategies require us to open a brokerage account. This process will take more than a simple phone call. All brokerages will require us to fill out an options approval form as designed by its compliance...
May 18, 2013 | Covered Call Exit Strategies, Options Calculations, Options Trade Execution, Stock Option Strategies
Exit strategy execution is a critical skill every covered call writer should master. In addition to managing positions where share price has decreased there are also situations where we can benefit when price has dramatically accelerated. Let’s look at a trade...
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