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...
Apr 20, 2013 | Covered Call Exit Strategies, Options Calculations, Options Trade Execution, Stock Option Strategies
I recently learned that covered call writing comes in all shapes and sizes. Although we are honored to have a significant number of international members, most trade US stocks on US exchanges with the rules we are familiar with. But what if the rules were different?...
Mar 9, 2013 | Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
Covered call writing involves options calculations…there’s no getting around it! It’s been a while since we talked math. What’s with all the frowns? Mastering and understanding the calculations (The Ellman Calculator will do all the work) will enhance our...
Jan 5, 2013 | Option Trading Basics, Options Trade Execution, Stock Option Strategies
When studying the basics of option investing we learn that the option holder of an in-the-money strike has a certain amount of intrinsic value which appears to be profit that would never be bypassed. For example, if we (as covered call writers) sold a $50 call and the...
Nov 17, 2012 | Option Trading Basics, Options Trade Execution
There are two ways to enter a covered call position. The first is called legging-in where the stock is purchased and then the option is sold. Two distinct trades are executed. The second is known as a buy-write order where the security purchase and option sale is...
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