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Stock Repair Strategy: A Real-Life Example with Lyft, Inc. (Nasdaq: LYFT)

Stock options have a myriad of applications. With our covered call writing and put-selling strategies, we seek to generate cash-flow in a low-risk manner. Another utilization of stock options is to mitigate losses when share price declines. This is known as the stock repair strategy. It is used when a stock is purchased ( with […]

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The Poor Man’s Covered Call (PMCC): Explaining Upside Potential + Premium Membership News

When using the PMCC strategy, a covered call writing-like strategy, our goal is to generate cash flow with a lower cash investment than traditional covered call writing. The BCI PMCC Calculator shows initial time-value returns from this short call premium as well as the upside potential should share price accelerate. This article will analyze this […]

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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.   […]

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Can Price Movement Be Explained by Profit-Taking?: A Real-Life Example with Global X Funds Infrastructure Dev. (PAVE)

On April 8,2021, Nathan shared with me his covered call writing trade with PAVE which was initiated 3 days earlier. This exchange-traded fund had a strong technical chart but the price started declining immediately after the trade was entered. Nathan commented that he read in a technical analysis book that when share price breaks out […]

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Application of the 20%/10% Guidelines Within a Broad Range of Implied Volatility Securities

I recently published an article titled Managing Implied Volatility Risk by Establishing an Initial Time-Value Return Goal Range. This article served as a catalyst for several inquiries from our members asking if the BCI 20%/10% guidelines applied to high volatility securities in terms of the protection we receive from declining share values. This article will […]

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Managing Implied Volatility Risk by Establishing an Initial Time-Value Return Goal Range + Webinar Login Link

When screening for eligible securities for covered call writing and selling cash-secured puts, we must establish how much risk we are willing to incur. There is no right or wrong here as the appropriate amount will vary from investor-to-investor. To determine security risk, we can look up implied volatility (IV) stats but that will simply […]

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Rolling Covered Calls Out-And-Up Means Adding Cash to the Position

One of the covered call writing exit strategies in our arsenal as expiration approaches is rolling in-the-money strikes out-and-up. This involves buying back the near-month strike and selling a higher strike in the next contract period. Since there is an intrinsic-value component to the cost-to-close, we must add additional cash to the position in order […]

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Using the Elite-Plus Calculator for “Hitting a Double” Results: A Real-Life Example with Redfin Corp. (NASDAQ: RDFN)

One of the covered call writing exit strategies available to us is hitting double. In March 2021, Duane shared with me a trade he executed using this strategy and inquired about how to enter this series of trades into the BCI Elite-Plus Calculator.   What is hitting a double? This position management tool is implemented […]

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Understanding Brokerage Statements for Covered Call Writing: A Real-Life Example with Energy Select Sector SPDR ETF (NYSE: XLE)

Our covered call writing and put-selling broker statements can be confusing when starting our option-selling careers. This article will detail the first 3 steps of our covered call trades (stock purchase, option sale and buy-to-close limit order) using XLE as reflected in one of my broker accounts.   Purchase of shares to initiate a covered […]

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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 […]

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