Why should we spend the time to educate ourselves on how to implement and manage covered call writing trades? The answer is simple: Once the 3 required skills (stock selection, option selection and position management) are mastered, we will put ourselves in a position to beat the market on a consistent basis. This article will […]
“Hitting a Double” Calculations with The Ellman Calculator
One of the BCI exit strategies that helps distinguish us from all other covered call writers is known as “hitting a double” We use this position management technique when share value declines such that option value drops to 20% (in the first half of a monthly contract) or 10% (in the second half of a […]
Managing Earnings Reports on Long-Term Holdings
Never sell a covered call or put option when there is an earnings report due to be reported prior to contract expiration. I have repeated this rule so many times over the years because I want our members to avoid the losses I incurred back in the 1990s before I realized how important it was […]
Protective Puts and the Collar Strategy: Selecting the Best Strike Prices/ Last Chance for Holiday Orders
Covered call writing, when combined with protective puts, is known as the collar strategy. The maximum gain is established by the short call strike while the maximum loss is defined by the long put strike. For example, if a stock is purchased for $48.00 per share and the $50.00 call is sold while the $45.00 […]
Understanding the “Paid-Up” Risk When Rolling Out-And-Up: A Real-Life Example with FIVE
One of our covered call writing exit strategies when the strike is in-the-money on expiration Friday is rolling out-and-up. This is when we buy back the near-month call (buy-to-close) and sell the next month’s higher strike. There are times when share appreciation has dramatically increased above the near-month strike price such that buying back the […]
“Hitting a Double” Using a Lower Strike Price
One of the exit strategies for covered call writing that allows us to enhance portfolio returns is known in the BCI community as “hitting a double”. We implement this position management technique when option value meets our 20%/10% guidelines. The initial short call is closed (buy-to-close) as share value declines early to mid-contract and then […]
Multi-Leg Option Trades: Understanding Calculations and Results
Covered call writing involves a minimum of 2 legs: we are long the stock (own the stock) and short the option (sold the option). There are many times when we employ the position management skill and options are bought back and new options sold or our underlyings are sold. This adds additional legs to the […]
Evaluating an Initial Covered Call Writing Portfolio
Setting up our covered call writing and put-selling portfolios requires common sense analysis once our watch lists have been established. Considerations include proper stock and industry diversification, appropriate cash allocation to each position and. strike selection that will maximize our returns and reflect personal risk-tolerance and overall market assessment. In this article, I will dissect […]
Price Charts Tell a Story and Provide Guidance in Formulating Our Investment Strategies
Technical analysis is one of the critical tools available to us in selecting the best stocks for our option-selling strategies. Price charts are much more than a sequence of dots and lines…they tell a story about a company which, with proper research, ultimately leads to a series of rules and guidelines that will assist in […]
Dow 30 Stocks and Covered Call Writing: Implementing the Premium Blue Chip Report
The risk inherent in covered call writing and put-selling is related to price decline in the underlying security. Investors with low-risk tolerance may turn to blue chip stocks which have proven track records of being reliable, cash-rich securities that frequently also generate dividends. This article will highlight how to utilize the monthly BCI Premium Blue […]
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Using The Ellman Calculator to Monitor “Hitting a Double” Results
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Analyzing a Rolling Down Trade During an Extreme Short-Term Market Decline
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Ask Alan #157 – How to Set Up a Poor Man’s Covered Call Trade
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When Should We Execute Our Option-Selling Trades?
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Should We Add a Short Put to Our Collar Trades?
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The New Stock Market- Algorithmic and High Speed Trading
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Options That Expire Weekly and Conventional Expiration Cycles
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Why the 3% Guideline Applies to Puts but Not to Call Options
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Earnings Pre-Announcements Explained and Categorized
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Tax Implications of Writing Covered Calls against Long-Term Holdings
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Alan Ellman Sunny, We use the stocks in the white cells. Th
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Sunny Alan, When you choose new candidates for option
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Barry B Premium Members, This week’s Weekly Stock Scr
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- Using The Ellman Calculator to Monitor "Hitting a Double" Results | The Blue Collar Investor […] Complete Encyclopedia for Covered Call W
