Is it true that when we sell cash-secured puts, our maximum return is the initial put premium? Come on now, we’ve all heard and read that statement. This article will demonstrate how I generated a 6-income stream series of trades by executing, and then managing, a 10-Delta Monthly cash-secured put with INMD from 9/20/2021 through […]

A 6-Income Stream Monthly Cash-Secured Put: A Real-Life Example with InMode Ltd. (Nasdaq: INMD)
Posted on March 19, 2022 by Alan Ellman in Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Put-selling

Generating a 3-Income Stream Put Trade: A Real-Life Example with ZIM Integrated Shipping Services Ltd. (NYSE: ZIM)
Posted on February 26, 2022 by Alan Ellman in Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Put-selling, Stock Option Strategies
We have all read that when we sell a cash-secured put, the maximum return is the put premium. Is that true 100% of the time? Enter our exit strategy arsenal. On 9/27/2021, Richard shared with me a series of put trades he executed with ZIM. It involved an initial put sale plus 2 BTC and […]

Rolling Weekly 10-Delta Put Options Prior to a Holiday Weekend: A Real-Life Example with Etsy, Inc. (Nasdaq: ETSY)
Posted on January 22, 2022 by Alan Ellman in Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Put-selling
One of the ultra-low-risk strategies developed by BCI in 2o20 involved selling weekly 10-Delta cash-secured puts. This created a greater than 90% probability that the puts would not be exercised (expire in-the-money or with intrinsic-value). Since 2020 – 2021 represented an unusually low interest rate environment, annualized returns of 8% – 15 % looked pretty […]

Comparing Implied Volatility and Delta When Establishing Projected Trading Ranges During Our Option Contracts
Posted on January 8, 2022 by Alan Ellman in Fundamental Analysis, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Put-selling, Stock Option Strategies
In 2020, BCI developed 2 ultra-low-risk option strategies, one using implied volatility and the other using Delta to establish low- and high-end trading ranges during our covered call writing and put-selling option contracts. We will use 5 real-life examples to analyze the trading ranges predicted by each approach. The data was taken on 8/30/2021 for […]

Collar Strategy Using Weekly Calls and Monthly Puts: A Real-Life Example with LABU
Posted on January 1, 2022 by Alan Ellman in Exchange-Traded Funds, Option Trading Basics, Options Calculations, Options Trade Execution, Put-selling, Stock Option Strategies
The collar strategy is a covered call writing-like strategy where protective puts are added to our covered call trades. This creates a ceiling (the short call) and a floor (the long put). Typically, the expiration dates of the calls and puts are the same. We must also ensure that the call credit and put debit […]

Selling Cash-Secured Puts Exit Strategies: The 3% Guideline: A Real-Life Example with NVIDIA Corp. (Nasdaq: NVDA)
Posted on December 18, 2021 by Alan Ellman in Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Put-selling
When we sell cash-secured puts, we must use all 3 of our required skills: stock (or ETF) selection, option selection and position management. Once we have selected an elite-performing security, we then choose an out-of-the-money (OTM) put strike that meets our initial time-value return goal range (2% – 4% per-month, for me). Without exit strategies, […]

Game Plan When Our Cash-Secured Puts are Exercised
Posted on November 20, 2021 by Alan Ellman in Exit Strategies, Investment Basics, Options Trade Execution, Put-selling, Stock Option Strategies
When we sell cash-secured puts, we have selected a stock or ETF based on sound fundamental, technical and common-sense principles. We generally select out-of-the-money put strikes that meet our stated initial time-value return goal range. Once the trade is executed, we move to position management mode. This article will highlight the choices we have available […]

“Hitting a Put Triple” with Lowe’s Companies, Inc. (NYSE: LOW)
Posted on September 25, 2021 by Alan Ellman in Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Put-selling, Stock Option Strategies
Exit strategies for covered call writing and selling cash-secured puts are an integral part of the BCI success model. In April of 2021, Tom was excited to share with me a series of trades he astutely executed with LOW where he generated 3 income streams with the same stock in the same contract month. […]

Selling Cash-Secured Puts to Simultaneously Generate Cash Flow and Buy a Stock at a Discount
Posted on September 4, 2021 by Alan Ellman in Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Put-selling, Stock Option Strategies
Selling cash-secured puts is a low-risk option-selling strategy geared to generating cash flow and beating the market on a consistent basis. In certain scenarios an additional goal of buying the stock at a discount is added to traditional put-selling. This article will analyze such a dual-purpose trade proposed by Safi on April 23rd 2021. […]

Reversing Delta with the PCP Strategy: A Real-Life Example with Etsy, Inc. (Nasdaq: ETSY)
Posted on July 10, 2021 by Alan Ellman in Covered Call Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Put-selling, Stock Option Strategies
The PCP Strategy, called the “wheel strategy” outside the BCI community, involves selling cash-secured puts and covered calls. One of the ultra low-risk strategies developed by the BCI team involves selling weekly cash-secured puts with Deltas of 10 (-0.10) or less with an annualized return goal range of 10% to 20%. This article will highlight […]
Podcast
- 80. Using the VIX to Achieve Higher Option-Selling Returns
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- 77. Buyers Have Rights and Sellers Have Obligations- Covered Call Writing Explained
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- 75. Reverse Stock Splits Understanding Contract Adjustments
- 74. Strike Selection Using Technical Analysis and Market Assessment
- 73. Mid Contract Unwind Exit Strategy at the End of a Contract
- 72. Rolling Covered Call Options on Expiration Friday
- 71: Dividend Yield Should Be a Secondary Factor for Covered Call Writing
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