Jan 21, 2012 | Stock Option Strategies
Mid-Contract Unwind: The major concern for covered call writers is the stock price dropping in value. The option premium collected is money in the bank. Most of our exit strategies are designed to mitigate these losses and turn losses into gains. However, as Blue...
Jan 14, 2012 | Stock Option Strategies
With expiration Friday and earnings season fast approaching our common sense principles (see chapter 8 of my latest book) become even more important. Never sell a covered call option with an upcoming earnings report is a critical BCI rule. But what if you own a stock...
Dec 31, 2011 | Stock Option Strategies
Covered call writing requires a logical sequence of stock and option decisions. Once we have screened our stocks to locate the greatest performing stocks in the greatest performing industries we must make a decision as to which strike price to use. Our choices...
Jul 16, 2011 | Stock Option Strategies
Wait a minute! What if I buy a call option instead of the stock and then sell a call option on that option? I’ll be spending less money than outright purchase of the equity and still generate cash from the sale of the call option! This idea has come to many of you and...
Dec 18, 2010 | Stock Option Strategies
Whenever a study is performed on covered call writing a stock is selected and the nearest out-of-the-money (O-T-M) strike is sold. This is repeated over and over and then the results are compared to the overall market performance. The usual conclusion is that covered...
Oct 23, 2010 | Stock Option Strategies
As safe a strategy that covered call writing is, there is some risk…the risk is in the stock, not in selling the option. That is why some investors who utilize this strategy buy protective puts to alleviate some of the risk. Definition of a protective put: A put...
Podcast