beginners corner
Archive | Put-selling RSS feed for this section

How to Use the Capital Adjustment Section of the Trade Management Calculator When Executing Multiple Exit Strategies in the Same Contract Cycle

Exit strategies for covered call writing and selling cash-secured parts are integral aspects of our trading system. It is critical to learn how to enter, calculate and archive these position management trades. This article will detail one example of this process using a real-life example with Etsy, Inc. (Nasdaq: ETSY) using 2 rolling-up put trades […]

14 Comments Continue Reading →

How to Enter & Calculate Rolling-Out-And-Down Cash-Secured Put Trades: A Real-Life Example with Invesco QQQ Trust (Nasdaq: QQQ)

When selling out-of-the-money (OTM) cash-secured puts, we calculate our initial time-value returns with this formula: % return = Put premium/ (put strike – put premium) When incorporating exit strategies into our strategy, we must properly enter these adjustments into our spreadsheets such that the calculations will be accurate and properly archived.   What is rolling-out […]

14 Comments Continue Reading →

Rolling-Up Our Cash-Secured Put Trades: A Real-Life Example with Etsy, Inc. (Nasdaq: ETSY)

When we sell cash-secured puts, we are seeking to generate cash flow or to buy securities at a discount. It is generally written that the maximum return for these trades is the put premium. This article will demonstrate how multiple income streams can be achieved by implementing our exit strategy arsenal and, thereby, achieve higher […]

16 Comments Continue Reading →

Calculating Mid-Contract Put-Selling Trade Status + A New Covered Call Writing Strategy Coming Soon

After entering our put-selling trades, we can calculate the current status of our trades mid-contract with a few simple entries into our Trade Management Calculator. In this article, a real-life cash-secured put example with Bristol-Myers Squibb Comp. (NYSE: BMY) will be highlighted. Hypothetical examples of winning and losing trades will be detailed on the spreadsheet. […]

7 Comments Continue Reading →

How to Enter & Calculate Closing a Weekly Put Trade After Rolling the Option in the Same Contract Cycle + Alan’s Wealth365 Webinar Registration Link

When we sell cash-secured puts, we are undertaking the contractual obligation to buy shares at the strike price by the expiration date. The option seller (that’s us) sets those parameters. In return, we receive a cash premium. The implementation of exit strategy opportunities allows us to maximize the success of our trades. This article will […]

8 Comments Continue Reading →

Dividend Stripping & Selling Cash-Secured Puts: A Real-Life Example with Walmart, Inc. (NYSE: WMT)

Whether we are selling stock options or buying stocks to accumulate dividend income, Blue collar Investors seek to generate cash-flow in a low-risk manner with capital preservation in mind. This article will highlight 1 way to combine selling cash-secured puts with dividend stripping.   What is selling cash-secured puts? A low-risk option-selling strategy where the […]

6 Comments Continue Reading →

Covered Call Writing & Selling Cash-Secured Puts: Strategies or Exit Strategies? A Real-Life Example with T-Mobile US Inc. (Nasdaq: TMUS)

Covered call writing and selling cash-secured puts are low-risk option-selling strategies seeking to generate weekly or monthly cash-flow. Can these basic strategies be considered exit strategies as well? In this article, I will make the case that, yes, they can be considered both.   When is covered call writing an exit strategy?  After selling a […]

16 Comments Continue Reading →

How to Enter Our Rolling-Out Cash-Secured Put Trades into Our Trading Logs + New Book Discount Offer

When we roll-out a cash-secured put trade, we are spanning 2 contract cycles. This article will detail how to enter and close our trades into our trading logs to best reflect the results over multiple time frames.   What is rolling-out an ITM put strike? This is where we buy back (buy-to-close or BTC) the […]

6 Comments Continue Reading →

Why are We Receiving a Higher Return When We’re Expecting a Lower Return?

On 2/21/2022, Frank emailed me about our 10-Delta ultra-low-risk cash-secured put strategy. With Moderna Inc. (MRNA) trading at $145.00 per-share, he asked about using the deep out-of-the-money $118.00 weekly strike that expired on 2/25/2022. Let’s evaluate this trade to see if it aligns with our strategy goals and personal risk-tolerance.   MRNA option-chain on 2/21/2022 […]

7 Comments Continue Reading →

Exit Strategy Choices After Exercise of a Cash-Secured Put: A Real-Life Example with Etsy, Inc. (Nasdaq: ETSY) + Free Webinar Registration Link

How do we manage our trades after allowing exercise of a cash-secured put? This gameplan must be in place prior to entering the put trade. In this article, I will compare 2 strategy choices, writing a weekly covered call or implementing the stock repair strategy. I will be highlighting a real-life trade taken from one […]

29 Comments Continue Reading →