Jun 4, 2016 | Exchange-Traded Funds, Investment Basics, Option Trading Basics, Options Calculations, Put-selling, Stock Option Strategies
Covered call writing involves buying a stock and selling a call option. When a put is also purchased to avoid significant downside loss, it is referred to as a protective put and the strategy as a whole is referred to as a collar. When a put option is purchased on the...
Apr 30, 2016 | Investment Basics, Option Trading Basics, Options Calculations, Put-selling, Stock Option Strategies
Strike price selection can be tailored to our covered call writing and put-selling trades based on overall market assessment. In bear and volatile market conditions we favor in-the-money calls and deeper out-of-the-money puts (lower than current market value). In this...
Apr 16, 2016 | Investment Basics, Option Trading Basics, Options Calculations, Put-selling
Covered call writing and selling cash-secured puts are similar strategies that do have certain differences. In my book, Selling Cash-Secured Puts, Figure 68 on page 214 highlights the similarities and differences between these two strategies. In this article, I will...
Apr 2, 2016 | Investment Basics, Option Trading Basics, Put-selling, Stock Option Strategies
We sell a covered call or cash-secured put and then the underlying company files for bankruptcy. What happens next? How are our positions effected? Let me premise my remarks by saying how unlikely this scenario is for investors who follow the rigorous screening...
Mar 19, 2016 | Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Put-selling, Stock Option Strategies
Selling cash-secured puts allows us to generate a monthly cash flow by undertaking the option obligation. There are many occasions when we can enhance these returns to even higher levels using our position management skills. This article will highlight several...
Mar 12, 2016 | Covered Call Exit Strategies, Exit Strategies, Investment Basics, Option Trading Basics, Put-selling, Stock Option Strategies
The Greeks play a major role in both covered call writing and selling cash-secured puts. Understanding these factors and tailoring our strategy based on this insight will allow us to elevate our returns to the highest possible levels. In today’s article, we will...
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