Feb 4, 2023 | Exit Strategies, Investment Basics, Option Trading Basics, Options Trade Execution, Put-selling, Stock Option Strategies
When selling covered calls or cash-secured put options, we must avoid the risk of earnings reports. This is an important rule of the BCI methodology. This article will detail how a series of put trades were managed during the August 2022 contracts from 7/18/2022...
Jan 14, 2023 | 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 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...
Jan 7, 2023 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Put-selling, Stock Option Strategies
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...
Dec 31, 2022 | Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Put-selling, Stock Option Strategies
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...
Dec 17, 2022 | Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Put-selling, Stock Option Strategies
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...
Oct 1, 2022 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Options Trade Execution, Put-selling, Stock Option Strategies
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...
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