Covered call writing is associated with 2 legs: we are long the stock and short the call option. If we add a protective put, we have converted the covered call trade to a collar trade which has both a floor (put strike) and a ceiling (call strike). The traditional collar trades uses out-of-the-money strikes for […]
Mitigating Losses After a Disappointing Earnings Pre-Announcement
A critical BCI rule for covered call writing is never to sell an option if there is an upcoming earnings report prior to contract expiration. Earnings reports are risky events we want to avoid. From time-to-time a company will pre-announce earnings especially if there will be a negative story to tell its shareholders when the […]
ETF Index Tracker Proposed Strategy: A Risk-Free Investment?
Using covered call writing and exchange-traded funds (ETFs) is a viable approach to generating monthly cash flow. I personally use this strategy in my mother’s portfolio. Can this investment style be expanded to include inverse ETFs to move this expanded path to a near risk-free system? In April 2017, Rushbabh, a member from Australia, was kind enough […]
Psychology of Stock and Option Investing: Ten Years of Observations
QUESTIONS FOR COVERED CALL WRITERS AND PUT-SELLERS: Why do retail investors buy high and sell low? Why do we sell our winners and keep our losers? Why do many of us feel that the market is rigged in favor of Wall Street insiders? Boy am I starting off on the wrong foot with this article! I’ll […]
Podcast
- 63. Rolling Decisions on Expiration Friday
- 62. Should I Unwind My Covered Call Trade 1 Week Prior to Contract Expiration?
- 61. Realized Versus Unrealized Capital Gains (Losses) for Covered Call Writing
- 60. Combining ITM Call Strikes & Stock Dividends to Protect in Bear Markets
- 59. ANALYZING 2 Month and 4-Day Covered Call Trades
- 58. Is This Trade a Winner or a Loser?
- 57. Evaluation Stock Purchase Price and Breakeven When Rolling Options
- 56: Selling Deep In-The-Money Calls to Exit Stock Positions
- 55. Expiration Dates Versus Expiration Times Clarifications
- 54. Selecting the Best Strike Prices for Our Collar Trades
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