Oct 12, 2013 | Investment Basics, Option Trading Basics, Stock Investing, Stock Option Strategies
Covered call writing can be used in conjunction with other strategies such as portfolio overwriting and dividend capture strategies. I have highlighted many of these covered call-related strategies in my books and DVDs. One of the strategies that has captured the...
Oct 5, 2013 | Exchange-Traded Funds, Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Traditional covered call writing consists of buying a stock or exchange-traded fund (ETF) and selling a call option to generate cash flow. Frequently BCI members will think outside the box and add additional strategies and products to create a covered call...
Sep 21, 2013 | Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
Strike price selection is a critical concept needed to master covered call writing. Selling in-the-money strikes is the most conservative approach to this strategy and selling out-of-the-money strikes is the most bullish. We use the latter when the overall market is...
Sep 14, 2013 | Covered Call Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Stock Investing, Stock Option Strategies
Covered call writing, like most investment strategies, has a certain risk/reward profile relating to potential profits and losses. A profit and loss graph is a graphical representation of the potential outcomes of this or other strategies. Let’s first have a...
Sep 7, 2013 | Covered Call Exit Strategies, Investment Basics, Option Trading Basics, Options Calculations, Options Trade Execution, Stock Option Strategies
Covered call writers receive option premiums for undertaking the obligation to sell our shares to the option holder if that holder decides to exercise that right. Understanding when and why exercise will take place is critical to the implementation of appropriate exit...
Aug 31, 2013 | Covered Call Exit Strategies, Investment Basics, Option Trading Basics, Options Trade Execution, Stock Option Strategies
Successful covered call writing requires the appropriate use of exit strategies to mitigate losses and enhance gains. In today’s article, we will focus on actions that can be taken when a stock price declines and capital preservation becomes a concern. Once we...
Podcast