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
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)
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 […]
Using Delta to Create Low-Risk/ High-Return Put-Selling Trades: A Real-Life Example with ETSY, Inc. (NASDAQ: ETSY)
When selling cash-secured puts, our strikes are selected based on our initial time-value return goal range and personal risk-tolerance. In the BCI methodology, we use only out-of-the-money (OTM) cash-secured puts unless our objective is to purchase a stock at a discount and have those shares put to us sooner rather than later. There are times […]
The Collar Strategy: Using Longer-Term Put Expirations
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 […]
Podcast
- 68. Volatility A Friend or Enemy to Covered call Writers and Put Sellers?
- 67. Should We a Short Put to Help Fund a Collar Trade?
- 66. Comparing the Cost-To-Close Covered Call Trades with Time-Value Return Goals
- 65: The 20%/10% Guidelines for Covered call Writing and Selling Cash-Secured Puts
- 64. Creating Dividend Like Income for Non Dividend Stocks
- 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
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