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Unusual options activity and covered call writing

Unusual Options Activity: Speculation or Cheating?

Covered call writers are average retail investors looking to generate monthly cash flow in small but consistent increments and then compounding those profits. In time, it could lead to financial independence. Other investors look to make a lot of money in a short time frame by undertaking much greater risk than we do. Still others […]

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Screening stocks for covered call writing

Stock Exchanges: The New Way To Calculate Trading Volume

In the BCI methodology for covered call writing, we require an average minimum daily trading volume for the underlying security of 250,000 shares or more. This is important because it increases the likelihood of favorable trade execution pricing and decreases the chances of price manipulation characteristic of highly illiquid stocks. For our premium members the […]

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Using LEAPS to increase dividend yield

Using LEAPS Covered Calls to Increase Dividend Yield

Innovative covered call writers can develop ideas of implementing a strategy in unconventional ways. For example, we can invest in a money market or CD and perhaps not even beat the inflation rate with those dividends. We can buy a quality bond and wait six months to receive our first (ho-hum) return. Covered call writers can […]

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Then Blue Collar Investor methodology for screening covered call writing candidates

Covered Call Writing – Fundamental and Technical Analysis: Earnings and Price Strength Analysis

Successful covered call writing requires discipline and appropriate analysis specific for this great strategy. In the Blue Collar Investor (BCI) methodology we incorporate three major screening components before we even look at options chains: Fundamental analysis Technical analysis Common sense principles The details of the entire screening process are discussed in my books and DVDs and in […]

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option liquidity

What Is Slippage And How Does It Impact Our Trading Success?

When studying investment basics, the term slippage has two applications. In general, it means having a trade executed at a price less favorable to the trader. Let’s look at the two areas where we may see this term used:  An order is executed at a worse-than-expected price  Stock and options  Slippage occurs when there is […]

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Portfolio overwriting with GMCR

Portfolio Overwriting- Selling Covered Calls on Stocks You Want to Keep.

For covered call writers the main stock option strategy is to purchase an equity specifically for the purpose of selling the corresponding call option. The investment time frame is one to two months as earnings reports will end the “run” of even the best performing equities (if you agree with my guidelines). In many cases share assignment is […]

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Pre-market activity

S&P Futures and Fair Value.

Many covered call writers start their day by tuning in to CNBC. They look to the lower right side of the TV screen and see: The S&P Futures are UP 5 points…..GREAT!!!!!!!!!! Fair Value is + 10…….what’s that mean? The market is expected to open DOWN…….ughhhh……why? To understand how this works, we need to first […]

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Facebook and the Greenshoe Option

When studying covered call writing we learn to master stock investing as well as option trading basics. Then we become elite investors by focusing in on the inter-relationship between the two. In this regard, a story most of us have been following the past two weeks has been the initial public offering (IPO) of Facebook […]

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