When we add a protective put to our covered call trades the strategy is known as a collar. To reduce the monthly cost of the long put, some investors will consider using longer-term put expirations This article will explore the pros and cons of this approach using Ciena Corp. (NYSE: CIEN). Collar trade information […]
Selling Deep OTM Cash-Secured Puts with Exit Strategy Enhancements
This is a follow-up cash-secured puts article to the one published last week where I detailed how I was selling deep OTM cash-secured puts on Apple Computer (AAPL) to generate weekly cash flow. I was using strikes with Deltas below -0.10%, approximating less than a 10% of ending in-the-money. My goal was to generate 0.4% […]
Selling Deep OTM Weekly Cash-Secured Puts to Generate Substantial Annualized Returns
Selling Cash-Secured Puts is a strategy similar to, but not precisely the same as, covered call writing. It is generally used to generate cash-flow as a standalone strategy but also can be implemented to buy a stock at a discount or used in conjunction with covered call writing (PCP strategy). During the COVID-19 crisis in […]
Creating a Portfolio of Weekly Cash-Secured Puts
Selling cash-secured puts is a strategy similar to, but not precisely the same, as covered call writing. In February 2020, Chevy wrote to me asking for an article or video addressing weekly cash-secured puts, a strategy he was using and looking to enhance. The 3-required skills Whether we are selling calls or puts and […]
Bear Market Concerns and our Option-Selling Portfolios
Covered call writing and selling cash-secured puts are stock option strategies with primary goals of income generation and capital preservation. Most of us are conservative investors who seek to beat the market on a consistent basis while minimizing portfolio risk. This is one of the mission statements of the BCI methodology. In the past few […]
Market Volatility and Our Option-Selling Trades: Using the VIX to Achieve Higher Returns
Options trading basics teaches us that the VIX or CBOE Volatility Index reflects the market’s expectation of the upcoming 30-day volatility. It measures market risk and is also known as the investor fear gauge. With this in mind, option-sellers are faced with a dilemma. Increased market volatility will translate into higher option premiums because the […]
Collar Calculations: Adding Protective Puts to our Covered Call Trades
Covered call exit strategies play a major role in mitigating losses in our BCI methodology. In most cases, we can keep losses to a minimum, turn losses into gains and enhance profits as well. Some covered call writers want the security of protecting against a catastrophic gap-down which can occur rarely. With the current market […]
Comparing Call and Put Strategies with Paylocity Holding Corporation (NASDAQ: PCTY)
Covered call writing or selling cash-secured puts… which is the best strategy? Well, they both offer great opportunities to generate cash-flow in a low-risk manner. I favor the former in normal to bull market environments and the latter in bear and volatile markets. On June 24, 2019, PCTY passed our rigorous screening requirements to earn […]
20%/10% Guidelines for Covered Call Writing and Put-Selling: Same Name, Different Circumstances
Exit strategies for our covered call writing and put-selling portfolios allow us to mitigate potential losses and enhance gains to even higher levels. In my books and DVDs, I detail the 20%/10% guidelines as one of the exit strategies available to us for both strategies. Although the name is the same, the circumstances are different […]
Comparing ITM Calls and OTM Puts in Bear Markets
Covered call writing and selling cash-secured puts are both outstanding low-risk strategies that can outperform the overall market on a consistent basis. I am on record as favoring covered call writing in normal to bull markets and include put-selling in bear markets. In normal to bull markets, covered call writing gives us the flexibility to […]
Podcast
- 50. Exit strategies Must Be Timed Properly
- 49. Analyzing a Multi Leg Covered Call Rolling Down Series of Trades
- 48. Rolling Deep OTM Cash Secured Puts
- 47. Rolling Up in the Same Contract Month
- 46. Should Delta Be the Sole Criteria for Covered Call Writing Strike Selection
- 45. Implied Volatility and Expected price Movement During the Life of Option Contracts
- 44. Can We Use ITM Strikes to Create a No Risk Covered Call Strategy?
- 43. Converting a Covered Call Trade to a Collar Trade
- 42. Why Was My OTM Put Exercised?
- 41. Collar Trades When Call Strikes Move Deep In The Money
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